This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Contributor: CME Group

Level: Beginner

Traders who win consistently treat trading as a business. While there is no guarantee that you will make money, developing a trading plan is crucial if you want to become consistently successful and thrive in the trading game. Every trader—no matter your experience—needs a plan.

Read More

Lesson: #1 Building a Trade Plan

Traders who win consistently treat trading as a business. While there is no guarantee that you will make money, developing a trading plan is crucial if you want to become consistently successful and thrive in the trading game. Every trader—no matter your experience—needs a plan.

Lesson: #2 Step 1. Your Trade Plan Objective

Setting your trading objective is one of the most important steps in developing a trade plan, yet is the one step that most new traders neglect. Purposefully thinking about your objective helps you clarify what you plan to achieve, how you plan to do it, and by when.

Lesson: #3 Step 2. Methodology Behind Your Trade Plan

There’s a method to your madness, right? Now that you have your objective in mind and know where you’re going with your trading, it is important to describe how you intend to conduct your trading business in general terms, i.e., your methodology.

Lesson: #4 Step 3. Risk Management and Your Trade Plan

Risk management is absolutely essential in successful trading. At the outset, all you need to do is simply define your risk management approach and any specific rules you intend to use.

Lesson: #5 Step 4. Trading Strategies in Your Trade Plan

Now it is time to focus on putting together your trading strategies, which at this point mostly concern how you establish your entry and exit points. In many (if not most) cases, the timing of your position entries and exits will be the most stressful and thought-over parts of the entire trade.

Lesson: #6 Step 5. Keep a Trade Log

A trade log is an excellent tool for viewing the bigger picture. In one snapshot you can get an overview of your trading history and identify successes and mistakes made along the way.

Lesson: #7 Trader Tips

Before you open your first trade, there's potential to make a couple of common mistakes. And as these are easily controllable, there's no reason to be caught out.

trading top