Trading Plan

Trading PlanLesson 2 of 96 min read

Your risk lines

The first section of the plan. The exact money you may lose today, decided this morning, and the single number of trades you are allowed.

Risk goes first in the plan because it is the only section that applies whether or not you take a trade.

Know the number before the day starts

Write the worst the day may cost you, in money, before you look at a chart.

Decided in advance, hitting that number is an event you already expected. Decided nowhere, the same loss arrives as a surprise and gets answered with another trade.

The size of your worst day is a decision, not an outcome.

The numbers you already set

Module 13 gave you two of them, so nothing new is being invented here.

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