You may have heard of this quote if you are an experience trader. However if you are reading this article as a new trader, I want to share this: Failing to Plan is Planning to Fail. This quote may sound blur or vague, but successful traders like George Soros, Ed Seykota and etc all plan their trades. Hence that is why they can consistently make money. So if you want to earn a living trading FCPO and FKLI, at least you need to build a winning FCPO FKLI trading plan. The plan that we cover here today can also be slightly modified to suit stocks or even currencies (forex).

If you already have a written FCPO FKLI trading plan, congratulations, my fellow trader! You are a rare minority and you are one step closer to have a successful trading career. Do continue read on to further improve on it. However, do not worry if you don’t have a winning FCPO FKLI trading plan now. At least you made the right decision to come here. You are in a position to to make improvements. This is because you can discover which techniques or rules work, so that you can avoid repeating expensive mistakes.

Steps to build a winning FCPO FKLI plan.

Every successful businessman and businesswoman have a business plan. They don’t just wing it. The same applies to successful traders. They always have a plan ready before the market opens to help them avoid emotional trading and losing money. Their trading plan are written in stone and that is how they can consistently earn a net profit in the long run. And so can you. Here are the steps of build a winning FCPO FKLI trading plan. Note: these steps can also be applicable to stocks and currencies (forex) as well.

Step 1. Trading style

The first step is to identify which trading style you are comfortable with. You can be a day trader if you have plenty of time during the day and have the ability to make quick decision every few minutes. However, you are suitable being a swing or position trader if you are comfortable waiting patiently for the right signal on the higher timeframe chart. A swing or position trader hold onto traders for more than a day.

Step 2. Mental Preparation

The second step of building a winning FCPO FKLI trading plan is to be mentally prepared.

How do you feel? Did you have a good night sleep? Are you emotionally ready to trade? Do you feel fresh and ready? If you answered no to either one of these questions, then it is better to stop trading for the day. This is because your emotions, no matter how small, will have a negative effect on your ability to identify opportunities and follow your FCPO FKLI winning plan. Chances are you will suffer unnecessary and silly losses.

Besides that, many successful traders also have a mantra or affirmation they repeat every day before the market opens. For me I always meditate before the market opens, so that I can objectively analyze the market. Check out some of the useful habits which you can pick up for your trading and life.

Step 3. Risk appetite

The next logical step is asking yourself: how much I am willing to risk per trade?

While different traders have different levels of risk appetite, the general rule is an amount that wouldn’t caused you to lose sleep at night or get angry at your family or spouse. Besides that, traders can also determine to their risk appetite based on the trading capital. It can range from 1% to 5% of portfolio. For example, you have $10,000 in your trading account and you are comfortable with the idea of losing a maximum of $250 per trade. So that is 2.5% of the entire portfolio. Then you can use this figure to place your stops.

Furthermore, if the market had triggered your cut loss, it is advisable to stop trading for the day. It is better to live to fight another day instead of revenge trading and lose even more money.

Step 4. Entry rule

Only when you have done step 1, 2 and 3, you can start further detailing your winning FCPO FKLI trading plan. You need to identify what are the rules that triggers you to execute a buy or sell trade. Example of entry rules:

“Buy if X and Y appeared in the chart, OR

Sell if A and B appeared”

Your entry rule should be simple yet proven to be profitable. The entry rule should also be simple enough for you to make quick decision. On the other hand, having an entry rule like this:

“Buy FCPO if X, Y, Z appeared and Soybean showed A, B, C and Dalian Soy showed E, F, G“

You will find this trading rule difficult to trade. Worst still, you will most probably confused yourself and missed out on trading opportunities. Entry rules that are simple have elegance and gracefulness and it is very easy achieve good trading results.

Step 5. Cut loss rule

Having a simple yet profitable entry rule is just one part of the overall winning FCPO FKLI trading plan. Many successful traders in this world also practice good risk management. Specifically they know when they are wrong, and are losing money and therefore willing to cut their losses small. So by the end of the day, they can still easily make profits in the long run. Unfortunately many retail or losing traders do not want to take a loss. They are willing to hold unto a losing position until they dug themselves into a huge deep hole of losses with almost zero chance of climb back up.

Before you enter a trade, you should know what is your cut loss rules and consistently stick to it. If $250 risk per trade is the maximum you can withstand, then stick to it. Do not deviate and say: today I am feeling good, so my maximum risk per trade is $500. Tomorrow I may be busy, so I back to $250 per trade.

Besides that, always set your stop loss order immediately once your entry is executed. Mental stops or placing stops an X min or X hour after entry make you trading on emotions. You will be tempted not to put your stop loss order. In the end you will suffer unnecessary huge losses.

Step 6. Take profit rule

Moving on, you also need to have a simple rule that tells you when to take profit. Some traders use risk to reward ratio to tell them when to take profit. For example if they are risking $250 per FCPO trade and their risk to reward is 1:3, hence their profit target will be $750.

Traders can also use trailing stops to govern their take profit rule, which are taught in my intensive futures program.

There are traders who also uses price action or indicators to tell them when to take profit. You can get creative and find the rules that you prefer. Just remember your potential reward must be greater than the amount of you risked, so that you can have a winning FCPO FKLI plan.

Step 7. Record your trades

If you had read until step 7, well done. But the job is not yet finish. You will need to record down executed trades, cut loss and take profit. By doing so, you can easily identify where you got it right. Most importantly you will also know whether entry, cut loss or take profit rules caused you to lose money in the long run.

Many traders often have good trading plan but because they do not record their trades, they often chop and change a good one once they faced a losing trade. Remember, trading is a business and you are also the accountant of this business!

Step 8. Review and improve

Thus by recording your trades, as discussed in step 7, you will be able to review it. You will be able to know whether your entry, cut loss or take profit rules or all of them need improvements. You can then search for information or participate in programs such as the Intensive Futures Program so that you know how to improve your trading plan.

If you already have a good trading plan, it does not mean that the job is done. Many successful traders constantly learn new knowledge to improve their trading plan as well.

Conclusion

Traders who consistently make money from the market because they have a winning plan. They understood their style, had solid trading rules and constantly record and review their trades. In other words, they treat trading as a business. While it’s not a guarantee that you will make money, building a trading plan is one of the most important aspects of successful trading. In our exclusive Intensive Futures Program, not only we cover various strategies and trading plans, we also cover money management, risk management and trading psychologies, so that you can building a successful trading career.

Learn to trade: Intensive Futures Program

Stocks & futures account opening: info@davidleetgy.com or contact us at 03-3002 5464