Trading Plan Outline

Trading Plan Example
Free Trading Plan Template
Trading Plan Example
Trading Plan Template Filetype:pdf Free

A trading plan is an outline successful traders use to keep focused on decisions with a high probability for profit. The trading plan also eliminates trading scenarios that do not meet your edge.

How To Create A Trading Plan. STEP 1: Jot down your reasons for buying or selling a particular market. STEP 2: Record your entry points for the market you’re about to trade. STEP 3: Next, write down when you are going to exit this market. This can be with a stop, a new exit signal, or when a market reaches a predetermined target zone.; STEP 4: Make these decisions when the market isn’t. A Trading Plan Form template in order to collect the data which is useful to shape and define your trading behavior. More templates like this. Employee End of Day Report. Use Template Preview. Track employee progress with an Employee End of Day Report Form. View goals, tasks, complaints, and questions online.

The outline consists of two core components:

The trading system, method or process that defines your trading edge, which includes buy or sell signals.
Money management and risk management parameters that match your skills and resources.

Finally your trading plan includes which markets (or securities) to trade, your goals, your emotional characteristics and then chooses a trading style.

Although not part of the trading plan itself, professional traders include a process for writing a trading journal [watch video].

Reviewing your performance represents a critical element of trading success ignored by most traders. Which is also why most traders never reach their full potential.

You can’t improve, or eliminate mistakes, if you don’t review your actions. Traders will always feel close to success, but never actually achieve financial independence without a structured process. The trading plan and the trading journal increase your odds of success.

Each of us brings unique goals, resources skills and education to the trading. We bring different capital, risk tolerance, personalities and emotions to trading. A well-thought trading plan gives you a document personally designed for success.

If you devote just 30 minutes per day for a week, in just seven days your trading plan transforms into an actionable trading process.

Let’s get started…

Trading Plan Components: Minimum Requirements

Trading Concept: Defining Your Edge
Objectives
Trading System
Money Management parameters
Trade review
Mindset

Outline Your Trading Plan Concept: Decisions for Your Strategy

What is the philosophy/strategy/catalyst behind your trading ideas?
Technical Analysis? News Driven? Long only? Momentum? Scalping? Intra day position?
How active will you be? (Day trade or swing trade)
What is your time frame for holding trades?
How do you identify when your edge is no longer offering a sufficient risk/reward?
How do you know when your edge is no longer valid?

Potential Trading Plan Concepts

“Old-school” trend lines (yes they still work!)
Moving averages:

1: Choose a duration for the moving average.

2: Will you use exponential or simple?

3: Will you use multiple moving averages?

4: Will you use multiple moving averages in multiple time frames? Xex menu 1.4 usb installer software.

Stochastics or MACD as a trend filter
Candlesticks but no moving averages. Many traders feel this is the truest sense of price action because they are not subjective.
Will you trade long and short or only one? Many successful traders only look to one side of the market. This makes it easier to identify opportunity.

Be honest.

Trading Plan Example

Admit we have limited resources.

Define your goals… Make Choice…Define Your Edge, and Document Why You Believe it’s a Solid Trading Strategy for You

Trading Plan Objectives

Self analysis
Defining personal objectives
Trading Ideas
Organizing your resources

Self Analysis

How much time during the day can you devote to your game plan and to actual trading? (this will dictate your trading system)
How many distractions can you expect to have?
Can you focus for hours at a time or in short time frames?
How much time can you devote to developing and improving your trading plan?
What time of day do you plan on allocating to this “after market” work?
When do you plan on doing your psychological work?
Do you know what psychological work you need to do?

Self Analysis Pt. 2

How would you rate your market knowledge?
How would you rate your trading knowledge? How will you improve both of the above?
How do you plan to assess progress?
What are your psychological strengths and weaknesses in relation to developing your trading system? (specific to your trading concept)
Strengths and weaknesses in terms of personal discipline that you will bring to your trading.
Do you have emotional or financial issues that may affect your ability to focus or trade effectively or follow your plan?

Documenting Your Needs to Align with Your Tradng Goals Based on your analysis what do you need to:

Learn-
Schedule-
Accomplish-
Eliminate-
Reduce-
Solve-

–>> How will you accomplish the above? –>>

What are you currently doing? –>>

What specifically needs to change?

–>> Document your methods…

Outlining Your Trading System

1)What is your edge? What is the concept you are trading that you feel will earn money?

2)How will you “prove” this concept with real money? (paper trading is a waste for discretionary traders other than learning how to use a software correctly)

3)How much money do you have personally? How much can you afford to lose or invest in your trading business? This includes capital to trade and living expenses.

4)How much risk can you afford to take on each trade, day, week and month?

5)How much money do you need to earn each year? Do you need to earn all of that from trading?

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6)What if you don’t make enough from trading to live off of?

7)What are your contingency plans and how will know you need to implement them?

Defining Personal Trading Objectives

Can you make more money than you need to live off of so that your trading capital can grow?
Based on the above are you being realistic or do you anticipate trading like a seasoned professional from the start?
How will you educate yourself after you begin trading your system?
How much do you expect to make as a percentage of your trading capital? (prop traders as well)
Are you basing your expectations on hope or actual trading history?
What risk level are you willing to accept to achieve that?
What is the largest draw down you are willing to accept on a daily, weekly and monthly basis?
How will you know your plan is working or not working? Who can you ask for advice or mentoring?

Trading Plan Formula: Filling in the Details of Your Plan

Trading Ideas:

Trading Plan Template Filetype%3apdf