Planning the trade

As the saying goes, you need to plan the trade, and trade the plan. Trading is a business, so sharpen your pencil and develop a trading plan that will help guide you throughout your trading journey.

Building your trading plan
Starting any business requires a plan – and building a trading plan is a crucial step in your development as a trader. In this video, CME Group explains how your trading plan is a working document in which you make assumptions about projected costs, revenues, and business conditions. A plan won’t guarantee you’ll make money, but it will help you define your goals, your trading methodology, risk management, trading strategies and how you track your progress.

Your trading methodology
Deciding how you intend to conduct your trading business – your methodology – is central to any trading plan. Start with some self-analysis – What is your experience level? Are you mentally ready for trading? – and consider what type of trader you may be. You’ll also need to know which markets you want to trade, when they’re open, how much equity you plan to use and what your risk tolerance is. Learn how in this video by CME Group.

Risk management and your trading plan
What is your attitude toward risk? What proportion of your capital are you prepared to put on the line on any one trade? Defining your risk profile is an essential part of any trading plan – it’s where you’ll consider how much leverage to use, your maximum trade loss and maximum daily loss. In this video, CME Group explains how to get your risk-management rules in place. That way, it’s easier to find trades that work for you and avoid those that are too risky.

Monitor your positions

Trading plans make risk management simpler – so does SaxoTraderGO. Our position module makes it easy to monitor all your positions in real time, view your profit and loss, and manage your stop and limit orders – all from one place.

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