Creating a trading plan is a crucial step towards becoming a successful trader. A trading plan outlines your goals, strategies, and risk management techniques. It helps you stay focused, disciplined, and objective when making trading decisions. In this blog post, we’ll discuss the steps you need to take to create an effective trading plan on Trademetria.
Step 1: Define Your Trading Goals
The first step in creating a trading plan is to define your trading goals. Ask yourself: what do you want to achieve from this trade? Are you looking to make short-term profits or long-term gains? How much risk are you willing to take? Once you have a clear understanding of your goals, enter this trade into Trademetria.
Step 2: Identify Your Trading Strategies
The next step is to identify your trading strategies. Will you be trading stocks, forex, options, or cryptocurrencies? What is your approach to technical analysis and fundamental analysis? How will you enter and exit trades? Answering these questions will help you develop a trading strategy that aligns with your goals.
Step 3: Determine Your Risk Management Techniques
Risk management is a critical aspect of trading. You need to have a plan in place to manage your risk and protect your capital. Determine your risk tolerance and set stop-loss orders to limit your losses. Consider using position sizing techniques to ensure that you don’t risk more than a certain percentage of your capital on any given trade.
Step 4: Establish Trading Rules
Establishing trading rules is essential to maintaining discipline and objectivity in your trading. Create a set of rules for entering and exiting trades, managing risk, and adjusting your strategies based on changing market conditions. Stick to these rules to avoid making impulsive decisions that could negatively impact your trading performance.
Step 5: Track Your Progress
Finally, track your progress and adjust your trading plan as needed. Review your trades regularly and analyze your performance. Identify areas for improvement and make adjustments to your trading plan accordingly. Remember, trading is a continual learning process, and your trading plan should evolve with your experience and knowledge.
Step 6: Add Your Closing Thoughts
Once your plan is executed, make sure you add your closing notes so you can review your plan from start to finish.
How to create your trading plan on Trademetria
Step 1: Let’s say that your plan is to go long TSLA when it breaks resistance at $218 and that you plan on holding this trade until it hits another resistance at $318 or if it fails, exit at $190. You trade this strategy often and you call it “Breakout”. Let’s look at the TSLA chart and let’s assume it already hit our entry price of $218.
Now, You know that you’ll be trading a stock, will swing trade using strategy “Breakout” with a profit target of $318 and a stop loss of $190. Let’s add all this to Trademetria.
First, add the opening trade on Trademetria. You can use the command bar like this:
Or enter this trade using broker files or manually.
Once the trade is imported, head over to Trade History to view how the trade looks so far:
Now, that you’ve entered this trade, let’s add our plan notes, strategy, stops and targets. You can even enter your own chart images into your notes. Click on the edit trade icon next to the trade or add your notes and tags right into the cell.
Now we must track this trade according to our plan. When you click on the trade details icon, you’ll see the tsla chart with our stop and target lines in place. We know where to get out, our strategy, and the reasoning behind the trade. Perfect plan!
Now, track its progress using your portfolio tracker. The screen below will show the open price, your max risk, your r-multiple, the strategy used, when you opened the trade along other details. You are risking $28k to make $100k. A great risk-reward or an r-multiple of 3.5.
Let’s say that it hit your target of $317 and you exited at $318. You enter this trade into Trademetria and profit $100k!
When you close the trade, you can update your notes with closing thoughts and go over them anytime you want. Easily find all your trading plans here.
Creating a trading plan is a crucial step towards becoming a successful trader. It helps you stay focused, disciplined, and objective when making trading decisions. By defining your goals, identifying your trading strategies, determining your risk management techniques, establishing trading rules, and tracking your progress, you can develop an effective trading plan that aligns with your goals and maximizes your trading performance.
Time to plan your next trade!