The Trading Plan

The Rationale of the Market Enviroment

&

A Road Map for a Trading Edge

The Trading Plan

The Day Traders Daily Preparation:

• 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)

"TRADE WHAT YOU SEE

TRADE ON PROBABILITIES

DEFINE & ACCEPT YOUR RISK"

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 Probabilites 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 Martindale 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