8 Steps to Develop a Steel Strong Trading Plan

Learn what a trading plan is and the steps you need to follow to create a solid plan for trading your favorite assets.

The ability to formulate and implement a solid trading plan is critical when trading online. A well-developed plan will give you guidance in choosing the appropriate market to trade, help you determine the ideal time to take profits, or identify when you should close out loss-making positions. In this article, we will look at what a trading plan is and the different steps you can follow to build a strong trading process.

Creating a solid trading plan and developing a solid trading process is not an easy task and should be revised according to your skills and progress.

One of the first things you need to do is to create a comprehensive plan with clear objectives that cannot be changed during trading but can be re-evaluated when the markets are closed. This plan should be adjusted based on changing market conditions and your own increasing abilities. It is important that you create your own plan, taking into account your trading style and goals. Using someone else’s plan would not reflect your unique trading characteristics.

What is a Trade Plan?

A solid trading plan is a thorough guide that helps you make decisions regarding your trading. It helps determine what to trade, when to trade, and how much to trade. It is important to develop a personal trading plan and not use someone else’s plan as your own, as their risk tolerance and available funds may be very different from yours.

A trading plan is important because it can help make rational trading decisions and define the ideal parameters for your trades. A well-structured trading plan is beneficial because it can prevent impulsive decisions in the heat of the moment.

Trading: Plan vs. strategy

A trading plan is a methodical approach to identifying and trading securities that takes into account various factors such as investment objectives, risks, and time. A sound trading process helps you establish guidelines and criteria for selecting asset classes and executing trades. It should be noted that a trading plan is different from a trading strategy, which dictates how to enter and exit trades to maximize profitability and minimize risk. A trading strategy can be based on either technical analysis or fundamental analysis.

Trading Plan Advantages

  1. by having a solid trading process, you can easily trade without wasting time or energy because you have already done all the hard work.
  2. a plan guides you to make decisions without emotional influence and you are able to take profits or limit losses rationally.
  3. when you follow your trading ideas and plan, you have a clear head and are more objective, gaining more insight into your trades and finding out what works and what doesn’t.
  4. if you keep records, you can learn from your mistakes and make better and more informed trading decisions in the future. A profitable trading process can take time and will be fraught with challenges and mistakes, but as long as you minimize losses and improve past mistakes, you will find the confidence and build the trading strength to face new challenges and be better prepared.

What you should consider in the Trading Plan

Your trading plan can contain all the information you find helpful, but it should always try to answer the following questions:

  1. do you have the necessary skills to start trading?
  2. what motivates you to start trading?
  3. how much time do you want to spend on trading?
  4. what are your trading goals?
  5. are you willing to take risks?
  6. how much capital can you allocate for trading?
  7. on which markets do you want to trade?
  8. what steps will you take for record keeping?


You need to treat trading as a profession and not a hobby and make sure you have done your homework, acquired the necessary knowledge and practiced your strategies.


To be successful in trading, you must have an incentive beyond the desire to make money. Find out what trading means to you personally and why it is important to you. For example, what draws you to the markets? If you have a desire to solve a puzzle, if you feel that trading is a stimulating and intellectually challenging experience, or an exciting game of probabilities and odds, then you know what drives you as a trader. Maybe you like the adrenaline of competition, or making decisions based on your instincts, or you like to work from home. If you know the answer, then you know your goals and can develop a trading style that fits your profile.


Consider how much time you can devote to trading. Can you trade while you work, will you make many trades per day or do you need more time? Don’t forget to schedule enough time to prepare for trading, practice your strategies, get more trading tips and ideas, and analyze the markets.

4.goal setting

Set goals that you can achieve and be very specific. Do not set unattainable goals or you will be disappointed.

5.take risks.

Before you get into trading, it is essential that you figure out how much risk you can take. This includes figuring out how much risk you are willing to take for each trade and for your overall trading strategy. Remember that market prices fluctuate all the time, and even the safest trades involve a certain amount of risk. Some beginners prefer to start with a lower level of risk to get a feel for things, while more advanced traders are willing to take on a higher level of risk to achieve greater profits. Ultimately, it is up to you to decide what level of risk you are willing to tolerate.


Before you start trading, take a look at your finances and figure out how much money you can allocate to it. Remember that you should never risk more than you can afford to lose, because trading can be risky and you could end up losing all your trading capital. If you don’t have enough money to start trading yet, you can practice with a demo account until you are ready to trade live.


Choose the market you want to trade. Do you want to trade forex or stocks, indices or futures? Each of these markets is different and requires specific knowledge. Learn as much as you can about each asset class, including the volatility of the market and the factors that affect the price of each asset and trading instrument you want to trade.

8.keep Records

If you want your trading plan to be successful and you build a solid trading process, it is important that you record all your trades in a trading diary. This will help you figure out what is working well and what is not. If you ever deviate from your plan, be sure to write down why and with what results. The more detailed your diary is, the more helpful it will be.

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