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Building a trading plan

1 min read3 sections

TABLE OF CONTENTS

A trading plan is the difference between a process and a series of impulses. It does not need to be complex, it needs to be written down and followed.

Your edge, stated plainly

Write the exact conditions under which you take a trade. If you cannot describe your setup in two sentences, you do not yet have one.

Rules for entry, exit and review

Define entry triggers, profit targets, stop placement and the maximum you will risk per day. Then schedule a weekly review, the plan only compounds if you study your own results.

Keeping a trade journal

Log every trade: what you saw, what you did, and what actually happened. Patterns in your losses are usually patterns in your process, not just your market reading.

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