Developing a Professional Trading Plan from A-Z
There's a classic saying in investing: "If you don't plan to trade, you're planning to fail." One Trading Plan is clearly the biggest dividing line between a lucky player and a professionally disciplined trader. This plan acts as a legal code that regulates all your actions in the market, helping to suppress emotional outbursts.
1. 6 Mandatory Components of a Standard Trading Plan
Your trading plan must fully answer the following 6 core questions before you are allowed to place orders:
1. What (What to trade?)
List of asset pairs you trade best (e.g. only trade EUR/USD, GBP/USD or Gold). Avoid trading too many products at the same time.
2. When (When to trade?)
Specify working time frames. Only trade during fixed Killzone sessions (London session or New York AM/PM session) to take advantage of IPDA algorithm money flow.
3. Why (Why enter the order?)
Checklist of technical setup. For example: Only enter an order when there is a liquidity sweep (Stop Hunt) at the beginning of the US session, creating a Market Structure Shift (MSS) with Displacement to create FVG.
4. How much (How much risk?)
The percentage the account accepts to lose on each position (e.g. 0.5% per order for a treasury account, or 1% for a personal account).
5. Management (How to manage orders?)
The rule for moving the SL to breakeven when the price creates a new BOS and the rule for taking partial profit (Partial TP) at the R:R mark of 1:2 or 1:3.
6. Rules (Special disciplinary rules)
Regulations to stop trading during the day (for example: stop trading after 2 consecutive losing orders or reaching weekly profit target).
2. Sample of Writing a Real-Life Trading Plan
Print your trading plan on paper and stick it right in front of your trading screen. Seeing it every day will remind your brain to always follow the set principles.
Trade disciplined and trade well! If you have any questions about this lesson, join our Telegram community to discuss.
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