1. Your personal skill assessment- Are you ready to trade real money? Why are you ready? Can you follow your plays without hesitation? Have you defined the criteria in writing of when you will start trading with real money?
2. Mental preparation- How do you feel? Are you rested? Have you had any mental or emotional traumas recently? Under what mental and emotional conditions will you NOT trade?
3. Determine Risk Level- How much of a percentage of your account equity are you going to risk on each trade? What is the most you can lose per month before you MUST stop trading? At what point, what is the criteria, do you increase the percentage you risk?
4. Goal Setting- What are your weekly profit goals? How do you determine your price targets before you enter the trade? Setup a monitoring method to track your profit target success. What are your goals short term and long term? How do you track the progress of those goals?
5. Trade Analysis- What is you pre trade analysis process? Do you have a methodical process in place for completing this? What is your post trade analysis methodology? Do you have a way to monitor your psychology during a trade? Have you developed a trading play book?
6. Homework- Have you developed a way of methodically doing your homework and research. How do you plan to document it? Have you outlined a continuing education plan? Do you have a trading library? Have you scheduled time to do your homework and research?
7. Busniess Plan- How much is it going to cost you to get into trading? What are your monthly expenditures? How much are you going to allocate to education? When would you reasonably expect to break even? What will you do with your profits? Do you have rewards in place for yourself when you meet certain stages of your plan?
8. Office Setup- How is your office setup? Do you have all the contact numbers to your brokers and internet service providers handy? Do you have a backup charting service (you can use a free one)? Do you have anti-virus software on your tradestation and do you run it every day? What do you do if your tradestation crashes in the middle of a trade? How do you plan to recover from a tradestation crash?
You should take these eight areas and add as many details to your trading plan as possible. The more complete your trading plan is, the clearer the path will be that you need to follow. You should revisit you trading plan about every three months to see how you are following it. Take a lot of time to complete your trading plan thoroughly it will benefit you more than you know.
1 comments:
Seriously risk management is only of important aspect of the Forex trading and its true that to Determine Risk Level- How much of a percentage of your account equity are you going to risk on each trade? What is the most you can lose per month before you MUST stop trading? At what point, what is the criteria, do you increase the percentage you risk?
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