 A trading plan is a comprehensive decision-
making tool for your trading activity. It helps
you decide what, when and how much to
trade. A trading plan should be your own,
personal plan – you could use someone else’s
plan as an outline but remember that
someone else’s attitude towards risk and
available capital could be vastly different to
yours.

 Your motivation for trading
 • The time commitment you want to make
 • Your trading goals
 • Your attitude to risk
 • Your available capital for trading
 • Personal risk management rules
 • The markets you want to trade
 • Your strategies
 • Steps for record keeping

1. You need a trading plan because it can help you make
logical trading decisions and define the parameters of your
ideal trade. A good trading plan will help you to avoid
making emotional decisions in the heat of the moment.
The benefits of a trading plan include:
2. • Easier trading: all the planning has been done upfront,
so you can trade according to your pre-set parameters
3. • More objective decisions: you already know when you
should take profit and cut losses, which means you can
take emotions out of your decision-making process
4. • Better trading discipline: by sticking to your plan with
discipline, you could discover why certain trades work and
others don’t
5. • More room for improvement: defining your record-
keeping procedure enables you to learn from past trading
mistakes and improve your judgment

There are seven easy steps to follow when
creating a successful trading plan:
1. Outline your motivation
2. Decide how much time you can commit to
trading
3. Define your goals
4. Choose a risk-reward ratio
5. Decide how much capital you have for
trading
6. Assess your market knowledge
7. Start a trading diary