How to Build Your Trading Plan: 21 Essential Questions

21 Questions You Should Answer in Your Trading Plan 

1. What are your trading goals? 

• Short-term goals: What kind of profit targets do you hope to achieve within a month or a quarter?
• Long-term goals: What are your overall goals or expectations for trading over a year?

2. What return rate do you hope to achieve? 

• What is your expected monthly or annual return rate? This should be set based on your risk tolerance and trading strategy.

3. How much risk can you afford? 

• What is the maximum loss per trade? It is generally recommended not to exceed 1% to 3% of your total capital.
• What is the maximum total loss range you can accept?

4. What is your risk-reward ratio? 

• Have you set a risk-reward ratio for each trade? For example, 1: 2 or 1: 3, to ensure that the potential reward is at least twice the risk.

5. What trading style will you use? 

• Is it day trading, swing trading, or long-term trading?
• Is your trading style suitable for your personality and time availability?

6. What is your trading strategy? 

• Is the strategy you use based on technical analysis, fundamental analysis, or a combination of both?
• What are your entry and exit conditions?

7. What technical indicators will you use? 

• Do you rely on specific technical indicators (such as moving averages, RSI, MACD) ?
• How do these indicators help you identify trading opportunities?

8. How will you analyze market trends? 

• Do you use trend lines, support and resistance levels to determine market trends?
• Do you analyze market volatility and adjust your strategy based on trends?

9. What trading tools and software will you use? 

• Which trading platform will you choose (such as MetaTrader 4, TradingView) ?
• What auxiliary analysis tools will you use (such as Economic Calendar, technical analysis software) ?

10. What is your daily trading preparation? 

• What preparations do you make before trading? For example, checking news, analyzing charts, setting up trading plans, etc.
• Do you check market news and the Economic Calendar to understand the market trends of the day?

11. How do you control risk? 

• How will you set stop-loss points? How are these stop-loss points adjusted based on market conditions?
• Do you diversify risk, such as trading different currency pairs simultaneously?

12. How will you manage your funds? 

• Do you have a money management strategy to ensure that losses in each trade are within acceptable limits?
• Will you adjust your position size based on the growth or reduction of trading capital?

13. How will you set profit targets? 

• Will you set specific profit target levels? For example, taking profits at specific price levels.
• Are your profit targets adjusted based on market volatility and trends?

14. Under what circumstances will you exit a trade? 

• How will you decide to exit a trade? Is it based on technical signals, price movements, or psychological factors?
• Will you exit early or delay based on market conditions?

15. How will you record each trade? 

• Will you maintain a detailed trading journal? Including entry, exit, profit and loss, and analysis.
• What tools will you use to record and analyze trades? For example, Excel, professional trading journal software, etc.

16. How do you respond to market volatility? 

• When the market experiences severe volatility, how will you adjust your strategy? Will you reduce your position or pause trading?
• Do you have a plan to respond to unexpected market events, such as news events or economic data releases?

17. How do you maintain trading discipline? 

• How will you avoid emotional trading, such as decisions driven by greed or fear?
• Do you have methods to control trading emotions, such as setting fixed trading times or limiting the number of trades per day?

18. How will you continue to learn and improve? 

• Will you participate in training courses, read books, or join trading communities to enhance your trading skills?
• Will you regularly reflect and optimize your strategy, adjusting your plan based on market changes?

19. How do you face trading failures? 

• When facing consecutive losses, how will you adjust your mindset and strategy?
• Do you have a specific recovery plan to help you refocus after a failure?

20. What is your trading schedule? 

• What time periods will you trade? Does this consider the high liquidity periods of the market?
• Do you have fixed times to analyze the market and formulate strategies?

21. What is your long-term trading plan? 

• What is your ultimate goal? Do you hope to become a full-time trader, build your own portfolio, or achieve financial freedom?
• Have you set long-term capital growth plans or specific financial goals?

Conclusion