What is in a Good Trading Plan.
Do you want to improve your trading by creating your very own Trading Plan, but do not know where to start. I have decide to put together a series of blog posts explaining what are the Top 10 questions that need to be answered in a Trading Plan, and an explaination in the following posts to help you create you very own Trading Plan.
A Trading Plan has only one purpose which is to guide the Trader to achieve his goals in Trading and in Life. It must pre-define a course of action to all situations a Trader will encounter. It must contain a system that can be easily followed, otherwise it is likely the trader will eventually not follow it.
Developing your trading plan is an essential process for a trader on his or her road to success, it can be a process which evolves over time as you expand your knowledge and learn about yourself.
The Top 10 questions a Trading Plan must answer:
- What are your Life Goals & Trading Goals?
- What is your Trade Entry Method?
- What are your Trade Exit Methods?
- What type of orders will you use to enter & exit?
- What are your Money Management Techniques ?
- How will you manage your Position Risk versus Reward?
- What is your Process for Open Trade Review & finding New Trades Picks?
- What is your Trading Success Profile?
- How will you Review your Trading System to measure & improve?
- What is your Trading Daily Routine-(Part1 & Part 2)?
Write your Trading Plan down
It is essential your trading plan is actually written down on paper so you can review it at any time, as there is something about putting your goals and systems in written word that actually make it easier to follow and carries more weight.
I hope you find this list of the Top 10 list helpful in developing your trading plan and your quest find the next Big Trend.
Stay tuned, over the next few weeks as I will be explaining these topics in more detail so you can better understand and develop your very own Trading Plan.
Next Blog Post " What are your Life Goals & Trading Goals"