Trading Plan: the Daily Guide for every eToro Professional Trader

Written by jscmal

Every eToro Professional Trader has his own Trading Plan that helps him to be a patient, objective and disciplined trader.

The Trading Plan is something useful for every trader and its important function is to be a set of guidelines to trade markets. It is a direct and concise representation of the trading strategy that you adopt and reflects how an eToro Professional Trader decides when it is the right time to enter in the market with a trade. Every trader is emotional and many times he opens trades based on emotions. The Trading Plan becomes an important set of rules that help every eToro Trader to open trades making logical and objective decisions and avoiding emotional trading. Have a Trading Plan helps to understand deeply the trading strategy that an eToro Trader is using and get the most from it. The Trading Plan is not simply a static and useful tool for trading but it is updated and refined with details for trading, following the eToro Trader improvements.

How to Build the Personal Trading Plan

The Trading Plan is something personal that every trader has to be able to follow easily, then it should be concise and structured with several components. A longer Trading Plan will be difficult to follow; then the best way to build a Personal Trading Plan is with essential parts that are really necessary.

An eToro Trader can structure his Trading Plan in Three Parts:

1. eToro Trader Profile
2. Risk Management
3. Trading Strategy

Every part of the Trading Plan has several important components. It is not possible to give a full description of every component with a few words, but a trader that wants to build a real Trading Plan can find the own response at every component question given here. The Trading Plan is not only a list of rules or questions but it also hosts trading details that can be images about Chart Patterns and Risk Reward Reports. Here is an example of Trading Plan Components.

1 – eToro Trader Profile

• Which Daily Affirmations give you motivation? Here you can see the Guru Talk Post about The Power of Daily Affirmation.
• What motivates you to be an eToro Trader?
• What trading goals do you have?
• What currency pairs do you trade?
• How much time do you dedicate to develop your trading skills per week?
• How much monthly profit do you expect to make using a percentage of your account balance?

2 – Risk Management

• What percentage of your trading account are you willing to lose before consider stopping the trade?
• How much percentile risk will you accept per trade?
• What is your attitude towards risk?
• How much of your account are you willing to risk at any point time?
• Which or how much of a drawdown is acceptable?
• How will you manage your portfolio’s currency exposure with risk correlation and multiple open trades?

3 – Trading Strategy

• Which is the main timeframe that you use?
• Which analysis methods will you use to determine the bias and entry/exit levels?
• What is your potential entry setup?
• Describe how you will determine your stop loss points.
• Describe your profit taking strategy.
• Be sure that you only trade clear and secure setup.

What conditions will signal your entry point?

What conditions will cause you to exit early (shifts in sentiment, fundamentals, etc.)?

How to Use the Personal Trading Plan

Every eToro Professional Trader knows that without a concise and direct Personal Trading Plan his ability to make money is reduced. The Trading Plan gives a strong support to respect the trading strategy adopted and then refine every action, reducing at the minimum the emotional trading and enhancing the number of trades with a large profit. It permits every eToro Trader to stay away from confused and low profit trading, because inside at every Trading Plan there are details about the strategy and information about trading pattern and signals. Then, when an eToro Trader compares the current market status with details, signals, patterns and notes that he added in his Trading Plan, he will open a trade only when he is secure to take a large profit. It is really important that an eToro Trader performs a secure and profitable trading and the Trading Plan is the right way to be organized, disciplined and more confident about markets.

Common Mistakes

• Many traders don’t build a Personal Trading Plan because they think that they can plan every action when it is really necessary. It is a real mistake because traders never will be able in every situation to be confident about the market.
• Traders that are too sure of themselves don’t build a Trading Plan because they think that they don’t need any plan to be a profitable trader. It is a mistake, because pride and arrogance will devour everything and it is usual for many of them to lose money, also the entire capital.
• Many Traders build a Trading Plan and after they don’t use it. This is a way to waste time. If they don’t use the Trading Plan that they have built they will lose the opportunity to improve their trading.

eToro Professional Traders have to follow and use their Personal Trading Plan every time they have to find an excellent entry point for trading. This must be an important habit for every disciplined and profitable eToro Trader.

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