Lesson 7 of 104:004 Sources
The trading plan: write it before you press Buy
Recorded. Publishing soon
Educational content, not investment advice. Nour explains how markets work. She never tells you what to buy or sell.
A trading plan is a written business plan for your trading, made while you're calm. CME Group lists five components: objective, methodology, risk management, trading strategies and a trade log.
- Objective: realistic and process-based, e.g. 50 trades following your rules.
- Risk rules (example): 1% per trade, 3% daily limit, minimum 1:2, stop always.
- Strategy as if-then rules for entry, stop and target.
- Turn it into a pre-trade checklist; any 'no' means no trade. Never edit it with a trade open.
Quick check
Three questions. Pick an answer to see why.
1.Which is NOT one of CME Group's five trade-plan components?
2.A realistic first objective for a beginner is…
3.When should you change your plan?
Sources
Every fact in this lesson is backed by the sources below.
- 1.CME Group Education — Building a Trade PlanA trading plan is a business plan; five components: objective, methodology, risk management, trading strategies, trader log
- 2.CME Group Education — Your Trade Plan ObjectiveSetting the objective is among the most important steps, yet most new traders neglect it
- 3.CME Group Education — Risk Management and Your Trade PlanEvaluate risk tolerance; define leverage, maximum trade loss and maximum day loss
- 4.CME Group — Trade Plan template (PDF)Template asks for maximum risk per trade and a daily dollar loss limit
Educational content, not investment advice. Risk warning: trading forex, CFDs, gold and crypto carries a high level of risk and may not be suitable for everyone. You can lose more than you put in. Souq Daily is an education platform. Nothing here is investment advice, a recommendation or an offer, and past performance does not predict future results.