Blueprint of a successful Stock trading plan

BLUEPRINT OF A TRADING PLAN

Here is the template for "A Trading Plan". Although overall guidelines remain the same, every person has to develop their own trading plan on the basis of their style. No plans will work for everyone. Hope this will help you to be more disciplined!

1. METHODOLOGY

1. Choose Your Trading system/setup
2. Trend following
3. Counter trend
4. Range Bound
5. Mean reversion
6. Breakouts/ Patterns
7. Choose the tools you need Moving Averages Volume Trend Lines
8. Choose your time frame Weekly, Daily For larger trend &context (Hourly, 15M, 5M To time your entries) 
9. Choose the instruments you will trade (index or stocks). Backtest your ideas or rules & finalize a limited number of instruments to trade
10. Define entry & exits (SL, Trailing SL & targets)

2. RISK MANAGEMENT

• Define your total trading capital (1 Lakh, 5 Lakhs, 10 Lakhs)

• Define your risk/max loss per trade(should NOT exceed 1% per trade &do not take more than 5 at a time)

• Based on the instrument chosen define the quantity (position size per trade)

• Adjust your max risk/loss as per SL level but don't change your SL

• Define how will you use your profits? Plan to take away a % of profits regularly

• IF YOU CAN MANAGE YOUR RISK WELL, YOUR PROFITS WILL BE TAKEN CARE AUTOMATICALLY SLs are MUST for every trade

3. EMOTIONAL BALANCE

• Maintain a trading journal where you track "all your trades". This is a must DO task

• Define a process to do post mortem of failed trades. You need to consistently review & improve your style/ methodology

• Start noticing your emotions before, during or after you close a trade. This is important to track the reason why you entered a trade & why you excited?

• NEVER take revenge trades after you make big losses. The most important thing to recover after a big loss is self-confidence & NOT money

• Pursue your hobbies, spend time with family, friends or do things which makes you emotionally strong

4.Tools

If you are a full-time trader & you trade for a living, you need to have the following tools

• Stable laptop or desktop at home

• Robust internet (primary) & a backup internet link (secondary)

• A mobile phone (as a backup) with internet 8 trading app

• Have multiple screens: attached to your laptop/desktop if you do multiple time frame trading

• Phone number of your broker

• Robust power backup to Cover you from power outages for 6-7 hours

• Above all SILENCE to have 100% FOCUS. Stay away from social media during the trading time!

Some Other Quotas:

Read More:

 1. Important things to remember successful Intraday trading

 2. Risk vs Return get the balance right in stock market

 3.13 Rules Suitable Tool for Day Traders With Rule-based