Trader's trading plan - 17 rules of my trading business!

What is a trading plan, why do we need one and how to make one?

A trader's trading plan can be as simple or as complex as you want it to be. Of course, a plan that is too simple is not informative enough to successfully implement key rules and/or strategies during each trading session. Conversely, if the plan is too complicated, it will be difficult for you to stick to it, and you may eventually give up using it altogether. Therefore, you need to think through the best option so that it is not time-consuming, while being detailed enough for self-analysis.

The main objective of the trading plan - keep you calm and relaxed during trading, because all market analysis should be done before trading, not during it. This is exactly what professional traders do. Amateurs and beginners are always nervous before they start trading, and therefore often their trading is impulsive and not well thought out.

Your trading plan must be dynamic. Change it as your market and trading experience grows and when data analysis clearly indicates it, but never during a trade or trading session!

Once your trading plan is written, you will find that trading will become more objective, you will be less emotional, and your trades will be more selective. It will add structure and organization to every trading session. It will become your ally when the market makes unexpected moves, and you will save yourself from making unreasonable decisions if the trade does not go as expected.

An outline of a trader's trading plan:

• Why I got into stock trading
• What is my personal approach to trading?
• What are my trading goals?
  • For a month
  • For this year.
  • Long-term
• What markets will I trade in?
• At what time intervals (timeframes) will I trade?
• What sets will I trade?
• Entry Rules
• Rules for setting a stop loss
• Rules for Setting Take Profit and/or trailing stop
• Risk management rules
• Premarket
• Postmarket
• What tools will I use for my trading business?
• Commentary on trade
• What I will use to continually improve my trading and education
• Notes on my discipline and trading mindset
• My Golden Rules and/or Trading Precepts

Example trade plan

Let's see how such a trading plan for a trader might look on an example.

1. Why am I trading?

I understand that trading is one of the most challenging and interesting professions. I accept this challenge and realize that I will have to constantly learn new things, improve my education, be consistent and persistent, have a trading plan, develop the right mindset and learn the right trading tools, I will overcome challenges to succeed and thrive in trading. This will allow me to manage my own life and destiny without relying on anyone else to create my own financial well-being.

2. What is my personal approach to trading?

My approach is that I should first analyze the market situation, using the daily and weekly charts. This will allow me to determine the presence of a clearly established market trend (trend) and its direction. As soon as I find consistency in this long-term period, I will aim to look for an entry point into the market on the intraday charts.

3. What are my goals?

Be a consistent trader and systematically build your trading business. Strive to achieve at least 50% percent of profitable trades.

• For the month: stay consistent and never miss "scheduled trades. Follow my trading plan without excuses.
• For the year: to systematically increase my trading volume if my trading results tell me to do so. Continue to improve my trading skills and education, learning something new every day about my profession and the market. Continue to decrease my losses and increase my profits in order to see a steadily increasing equity curve!
• Long-term: Make money trading for a living! Create several accounts - one for earnings for current expenses, one for long-term investing. This will allow me to eventually create a "retirement account".

4. What markets will I trade in?

For now I will focus only on the stock markets, but over time I will use other trading instruments as well.

5. What time intervals (timeframes) will I trade on?

At the beginning, I will only use daily charts.

6. What sets will I trade?

I will be tracking the appearance of the next two "trending" settings:

1. Consolidation/breakdown is about 20Ma,
2. Rollback to a minor support level or to the 20 MA.

7. Entry Rules:

Will be exhibiting limit orders at ask price after the trade signal is received. If the entry was made by an incomplete possible volume, I will try to add to the position at a more favorable price of the instrument.

8. Rules for setting a stop loss:

The price at which my stop loss will be placed will always be determined before entering the market, and will be logical in relation to the entry point.

9. Rules for setting a Take Profit (and/or) Trailing Stop:

Half of the profit will be fixed when the price approaches a given support/resistance point, and should have a 2:1 profit/risk ratio. The final profit will be fixed after the price confirmation of the end of the current trend (on the entry chart), if the first final target has already been reached.

10. Risk management rules:

My risk per trade will be 1% of my current (daily adjusted) trading capital. I will not have more than 4% of risk at any time.

11. Premarket:

1. I will open a trading terminal.
2. I will download charts of the tools I work with.
3. I'll do some analysis, look at the economic calendar to see when the major news releases are today that could affect a sharp price movement.
4. I will write down the main trading ideas for consideration.
5. I will study the opportunities and points to enter the market.
6. I will set up sound alerts near the entry point.

12. Postmarket:

1. I will record the results of today's trading in the trader's journal, I will place there screenshots of trades.
2. I will review all open trades and possible actions for the next trading day.
3. I will write a commentary on all closed trades to determine if I met my trading plan for the day.
4. I will briefly write down my main thoughts on trading for tomorrow.
5. I will close the terminal.

13. What tools will I use for my trading business?

• Personal computer;
• Super trader pro - trading platform;
• Economic news and economic calendar, stock picker;
• Trade Journal and Tables.

14. Commentary on Trade:

I will review notes and screenshots of each trade from the last 5-8 days after the close and after all the prejudices and emotions have subsided. I will write in my trader's journal my thoughts and thoughts on how I can improve my trading process in the future. I will check the log twice a week, keeping track of my entries, to see what is yielding positive results in trading and with what frequency. I will adjust my trading plan according to the clarified information.

15. Continuing Education:

Read one new book per month on the market and trading. The author is chosen arbitrarily, according to personal preference. Watching two seminars/conferences a year when/if a trading mentor/book author/educator of my choice will participate or conduct something similar.

16. Notes on my discipline and trading mindset:

I will follow five fundamental truths about the trader's mindset from Mark Douglas, author of The Disciplined Trader.

1. Anything can happen!
2. I don't need to know what's going to happen next to make money.
3. There is a random distribution between gain and loss for any variable that defines the market edge (edge).
4. An edge is nothing more than an indication that there is a higher probability of one possible development than the other.
5. Every moment in the market is unique.

17. My Golden Rules and/or Trading Precepts:

1. I will be disciplined every day and in every transaction.
2. I will have my own trading plan.
3. I will constantly work on myself, learn to trade and improve my skills.
4. I will learn to manage my emotions so I can make thoughtful and informed decisions.
5. I will use only signals from my own trading system to enter the market, not someone else's advice.
6. I will never let the results of the last trade influence the subsequent trade.
7. I will always keep a detailed trading journal.
8. I will always abide by the money management rules I have set up in advance.
9. I will never add to a losing trade.
10. I will always trade only on the trend.
11. I will always be patient, the market will not close and tomorrow there will be a new opportunity to open a position.
12. Everything I do will serve the success of my business!

Trader's trading plan - is a living document and is subject to change as your personal experience will also grow. However, the absence of a plan is a direct path to losing money. Remember: Without a clear trading plan, you're just gambling, not building a trading business.

Live trader diaries

• Personal log (diary) of the trader

More interesting tricks of trade psychology

• How does the trader's brain work? Neurobiology of the speculator
• Trader's trading target: 14 psychological rules for success
• Trader's responsibility and 4 methods of future success in trading
• Does the trader know what he wants?