Developing Your Trading Plan

The Trading Plan


The Day Traders Daily Preparation:

The Trading Day

Grade how alert you feel between 1 - 10

  • Any Distractions ?

  • Complete the Prep Sheet

  • Trade Log

  • Research the Daily Brief

Don't Trade until this Preparation has been carried out Phase I 08:00 - 11:30 Phase II 13:30 - 16:30 (Spot Market Close)

Phase III > 21:00 hr (Futures Market Close)




Trading Objectives:

Morning Trading = 5 Ticks Afternoon Trading = 5 ticks

NB* Tick Per Lot size i.e 1 lot = 10 euros 5 lots = 50 euros 5 Ticks on a 1 Lot = 50 euros 5 lots= 250 euros Money Management Principles

  • Divide the Trading Account into 20 Units (or 40)

  • Daily loss limit the size of 1 Unit of the Trading Account

  • Have a Nett 5 - 10 tick per day objective (after Commissions)

  • Trade for 5 ticks AM

  • Trade for 5 ticks PM

  • Focus on Probabilities on each trade

  • Diversify one's trading

  • i.e Trade Butterfly Spreads

  • Or Spread Trades (Not to be confused with Spread Betting)

  • Outrights to be traded with extreme caution

  • Zero Tolerance on the Daily Stop

  • Stick to the Butterfly Spread as much as possible

  • Trade the Anti Martingale Strategy

  • Scale IN to Trades

Losing Trades:

  • Take a Pause. Change one's state of Mind (Stand Up, Tea Break or take a Short Walk)

  • Wind Down - And Consider what is going wrong!

  • Reduce one's Lot Size

Trading Performance Review

  • Review Objectives defined

  • Compile a Daily Record

  • Record if how much one allowed a position to be off side

  • Number of Trades

  • P\L

"Instead of hoping the Trader should fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a bigger profit!"

Jesse Livermore Reminiscences of a Stock Operator by Edwin Lefevre

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