Surprisingly, a good trading plan is not all about strategies to enter and exit the trades, but a good trading plan is about good money management. This is a very personal thing and only you can stick to your own plan. Actually, your trading plan is a combination of many strategies, some you can reuse from the other traders, some you can develop on your own.

In general, a good trading plan should include strategies for:

Profit Maximization and Loss Minimization: Professional traders usually think about how to minimize their losses first before they can focus on maximizing their profit. Cut-loss tools and strategies are always essential.

Your risk profile: How long do you dare to keep a losing trade?(hope that the trend will reverse). How much are you willing to lose in a trade? Answer those questions and you can derive your stop loss policy. Another thing is your risk reward policy. It is very important to establish your maximum exposure to risk. Depend on your confidence you can set up the maximum exposure, however it should be better below 5% of your risk capital.

Your style of trading: Know what kind of traders you are, day trader or position trader, swing trader. Plan the number of trades per week/month - so that you don’t need to sit in front of computer 24 hours/day - you just enter a trade when you see profit signals and just wait for results to make next decisions (jump out or continue to ride the trend).

A budget: Know what is your limitation.

Well defined entry and exit strategies: You can develop and test your own created strategies. However it would be time-costly.

Handle moving stops, or add money to existing trades: Play moving stops to ride the trend to maximize your profit. And apply the anti-marginal rule: add money to winning trader, get money out of losing trade.

Diversification: Very basic rule of trading. Never put all the eggs one basket. You can minimize your risk by this very simple rule.

In conclusion, plan your trade and trade your plan. Stick to the plan in trading. But also remember to continue learning and exploring new options to adapt with the never-ended changing market.

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