Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk

of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.

Sample Trade Plan

A POINT OF REFERENCE

1. Strategy
Product

- NQ Futures

Product Information

- Consider which information about a product you need in order to trade it.
- E.g. Average/max/min 15min range and volume per time slot; daily
range/volume histogram; overnight range/volume histogram; harmonic
rotation histogram etc.

Size

- 2 lots ($10 per tick total)

- Must consider how to increase and decrease trade size, e.g. based on p/l and
consistency generated on current size.

Trade entries

This is something which is very important. You must know exactly what a trade
looks like and in what circumstances you will take it. Without knowing this, you are
taking random trades and it is MUCH harder to be able to work out what youre
doing right and wrong.

- What is the timeframe you will enter in? E.g. 15mins for day trades.
- Any indicators involved
- Location
- Context
- Approach Consider whether you need lower TF chart for entry purposes
(e.g.
- Trade activity/price action when it gets there
- What do you expect to see after entry

Relative importance of each individual piece of information must be weighed.

Make sure you know what it is that youre looking at.

Stop management

- E.g. 6 points per trade per lot maximum and aim for 4-5 points
- All out at specific level relative to the market structure if at all possible

*** 6 points max is there to give a little room to adjust around market structure. If youre aiming for 4-
5 points per stop, you have 1-2 points to do this with***

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.
 Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.

Trade management

- E.g. Target of 5-7.5 points per trade per lot ($200-300 trading 2 lots at $10
per tick)
- Entry is all in and not scale in. This doesnt mean that you couldnt enter part
of the trade close to your entry if its struggling to get there this need to be
specific within 1-1.5 points of entry price MAX and you must always
ensure entry price size is immediately adjusted (before any fill) to
compensate and ensure planned position size is maintained and not
breached.
- Exits are either all-out or scale out scaling out can be confidence building
and means you dont have to get things spot on every time. Suggest you look
for a high probability scale, a fixed but larger target (identified by size and
market structure) and possibly a trailing runner.
- Campaigning this is simply buying and selling within an overall position in
order to improve you average position price. THIS ISNT SOMETHING
WHICH YOU SHOULD DO WHEN YOURE TRYING TO ACHIEVE
CONSISTENCY IMO.

Trades per idea

- Number of trades in line with specific setup/idea should be limited as if its

likely to work, shouldnt keep getting stopped out.
- Limit number of losses per setup/idea to 2 or 3 full stops to act as a circuit
breaker.

Daily loss limit

- Be aware of how many trade setups are available to you per day and allow
yourself to trade a decent number (3-5 minimum)
- E.g. 3 or 4 full stops total down for day (for 2 lots this is -18 24 points
per lot i.e.-$720-960 total - this is possibly a little high to begin with and you
may want to tweak things to take this to -$500-600)
- Loss limit violation rules there must be consequences for a violation of daily
loss limits, e.g. you sit out the next session, but still watch the market as
usual.
- Also think of possibility of reducing position size the closer you get to your
daily loss limit. E.g. 1/2 after 50% to daily limit. This could give you the
flexibility to take extra trades within your overall daily loss limit total.

Daily Target

- 3-4 winners, or 15-20 points per lot ($600-800 at $10 per tick)
- This is in order to build some consistency and should be altered as you
develop as a trader later on.

Time of day

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.

- Time of first and last trade E.g. 9:30am + 5mins (just after cash open),
finishing at close
- Consider whether you allow overnights NO YOU DO NOT ALLOW
OVERNIGHTS RIGHT NOW AS YOU CANNOT CONTROL YOUR RISK.
- News/economic release trade YOU MUST NOT RUN A POSITION INTO
RATE ANNOUNCEMENTS, IMPORTANT ECONOMIC RELEASES AND
MOST IMPORTANT EVENTS. YOU MUST KNOW WHAT THESE ARE FOR
EVERY SESSION.

***YOU MUST HAVE MANUALLY BACK-TESTED (I.E. BAR BY BAR) YOUR METHODOLOGY OVER A
REASONABLE NUMBER OF TRADES IN ORDER FOR THE RESULTS TO HAVE SOME SIGNIFICANCE (30
MINIMUM) ***

2. Daily Requirements
Preparation

- At specifically what time will this happen each day/week and how long should
it take? It should happen every day consistently at a specific time and you
must give yourself long enough to prepare so as to not be rushed.
- Daily and Weekly analysis to give better clarity on current market intention.
- Economic releases, important speeches, Earnings, IPOs, Bond Auctions, Rate
Decisions.
- Assess the current state of the market is it balanced or is it imbalanced and
to what extent?
- Where is the market currently trading relative to yesterday (daily prep) and
last week (weekly prep) and what is it doing?
- Make sure you are centred and have a pro trader mind set going into each
trading session. This could be created by some sort of specific routine (even
simply the prep) for example.
- Make sure your environment it set up so that you can maintain a FOCUSED
TRADING MODE.
- STANDARDIZE THIS PROCESS.

***YOURE DOING THIS IN ORDER TO IDENTIFY THE LIKELY CONDITIONS AND TO FIGURE OUT
WHETHER THEY ARE LIKELY TO BE PROFITABLE FOR YOUR SPECIFIC STRATEGY OR NOT (AND YOU
WORK OUT WHICH CONDITIONS ARE BY USING YOUR LOG AND REVIEWING IT)***

Record Keeping/Trade Log

- This needs to be thorough enough to identify the key aspects of your strategy
performance and personal performance.
- Should include product, size, date/time of entry/exit, initial targets and stop,
entry price & actual exit price, setup type (if you trade more than one), target

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.

type (fixed or trailing), exit type (target, trailing stop, stop, scratch etc.),
market conditions (balanced/imbalanced relative to longer timeframe), error
(can be an error code e.g. fat finger, didnt take stop), psychology (can be
code e.g. didnt want to miss out, didnt want to take a loss).
- Also could record how good your exit is by how much further market moves
against or for you in current move/leg/rotation/zig.

Journaling

This is a fantastic way to learn about yourself and the markets. Its also a great
thing to do if you can cement it as a habit so that you break the chimp mode
thinking when you take some bad beats and are struggling to make money. By
making you think about what youre writing, its often enough to allow the human
mind to regain control.
You must look at some sort of application which makes this easy to accomplish.
Evernote is one and Microsoft OneNote (which I use and prefer) is another. You will
be able to use key words and then search your market journal later on in your
review process. Both these apps are available for free online although they are the
cut down versions. Evernote has a premium subscription and OneNote is available if
you have MS Office or as a standalone product.

3. Using Your Data

Review

- What is the frequency of review (e.g. once a week or once a month)?

- What day and time does it happen?
- How long will it take?
- What are you looking for?
- Have your goals been met?
- What is your error rate?
- What is the psychological impact on your p/l for specific emotions? You can
figure this out with filters or pivot tables in Excel.
- What are your most profitable trades?
- What are your most unprofitable trades?
- What kind of things are appearing in your journal entries and are there any
patterns in thinking when youre in the heat of battle?
- Are there any new trade ideas for you to research and test?
- Etc.

Goals

- Once you have reviewed your trading for the last period (e.g. last month),
you need to set goals for the next.
- P/L goal

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.
 Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.

- Expectancy goal
- Error rate goal
- Goals must be realistic and attainable
- Celebrate your goals.
- Etc.

4. Research
Idea Generation

- What are your sources of idea? E.g. Observation, peers, books etc.
- How will you filter out ideas? E.g. in line with your core trading principles,
effort, immediate quality etc.

Research

- How will you research your idea?

- Will you do this manually or using software or both?
- Will you use Excel, built-in platform features or 3rd party specialist software?
- How much data do you need?
- How many setups or situations do you need for conclusions to be valuable?
- How will you test robustness? E.g. If you alter parameters or product, do you
still get decent results?
- Does a negative signal demonstrate something specific? E.g. does not
breaking overnight high or low lead to a big directional move with 1 or 2
sessions?

Testing

- What entry trigger will you use?

- How many trades do you need to back-test?
- How many trades do you need to trade simulated?
- What would invalidate the idea? I.e. just because there are a string of losing
trades, this doesnt necessarily mean the setup isnt good and vice versa.

Your trade plan should give you POINT OF REFERENCE for everything that
you do. It should be ever evolving and feed into itself. So even if you start
out with something youre not extremely confident with, its important to
take that first step and have something to build on.

***THIS IS A SAMPLE TRADE PLAN ONLY THE SPECIFICS ARE EXAMPLES AND NOT
RECOMMENDATIONS. YOU MUST FIGURE OUT YOUR TRADE PLAN DETAILS FOR YOURSELF. THERE MAY
WELL BE OTHER SECTIONS THAT YOU WISH TO COVER***

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk
of loss and is not suitable for all investors. Past performance is not indicative of future results. Opinions, market
data, and recommendations are subject to change at any time.