Access your free Trade Plan PDF document so you can plan out every trade, prep for every trading session and review how your trading went and the impact you had on the trading outcomes.
What is a Trading Plan?
A trading plan is a plan that is made prior to entering the financial markets. It often includes the rules you have for entry conditions, exits and longer-term concepts outlining your overall plans. This might include specific strategies and general plans which should be drafted up in a word doc specific to your own needs.
As for day to day trade planning, this is something that is designed to help you prepare for the trading session, get in the mindset for a successful trading day and have a pre-planned map of expected trade outcomes for the session. It also allows traders to reflect on that session post trade, see if the plan was followed and assess if any controllable changes could have been made.
Trade Plan Layout
This trade plan is built for daily use. It aims to get you mentally prepared for the trading session, assess the markets and also review any key elements that could impact the trading session.
It also provides some reminders on finding your trading peak through preparation for the session.
Pre Market Preparation
Page 1 is all about getting ready for the session, which starts an hour before the trading session. It also includes some general peak performance concepts.
It includes 1 hour before setup and 30 minutes before to get ready for a successful trading session.
This area also contains a range of phrases to help understand and recalibrate your mindset to be as effective as possible as a trader when the trading session starts.
The Trade Plan
Differing from a “trading plan’ that focuses on what strategy to use overall, risk management policies and so on, this Trade Plan focuses on the hard facts of what you can see in front of you, develop an understanding of your mentality and outline your expectations of the trading session in front of you.
The result is written at the end of the session to see what actually happened which can then be compared to your actual trading and also the pre-market trade plans that you wrote out.
Finally there is a section where you write how you could improve. This is for things like, entering the trade earlier than originally planned, risking more or less than expected, closing trades early, feeling stressed or frustrated and so on. Identifying weak points that you can control can be a great way to learn and develop as a trader and modify your methods to improve long term.
Entries into Trade Plan
How are you feeling?
This is to outline your current mental state and how you feel in general. It is important to write this down daily so that you can identify any moods or feelings that may affect your trading. This way you can identify a feeling and then avoid trading for that session until you feel better.
Is there anything that might impact your ability to trade this session?
This section might list something like, feeling unwell, ate poorly today, have some pain, stressed, tired, money pressure or bills coming in etc. This is to identify anything that could impact you so that you can assess more deeply and avoid any negative impacts to your trading.
Expectation
This is where you write out your expectations of the market. As an example, if you trade the FTSE or DAX, you might write something along the lines of…
Expecting the market to turnaround from [small price range] and aim for [price target] with safe stops resting at [price for stops]. This is to be written down before you start trading so that you can compare your actions to your theoretical plans. This process can help you to build trust in your knowledge and experience over time, get you to quantify your reasoning behind trades and also reflect without saying things like “I was going to trade short here” etc. If it is written, it is set and you can easily compare without the benefit of hindsight.
Result
Record what actually happened in the market, how you traded it and compare this to your expectation that was written before the market session began.
How to Improve
This section is to identify and write out the ways you could have done better (in line with things you can control at the time). This doesn’t mean, trade long instead of short on a day the market goes up for example. It means to look for ways you could have reacted and traded differently, to look for ways you didn’t adhere to your pre-written plan and to better understand who you are as a trader.
Some examples might include:
Closed trade early
Overtraded
Entered the trade early or late
Used the wrong volume or lots on the position
Stop and targets placed in the wrong place (compared with written plan)
Panicked and exited trades.
Moved stops further out and took bigger losses.
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