Futures Trading – The Complete Guide To Trading Futures
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Llewelyn James 0 Comments. Please download a free trading plan template that includes an example of a completed trading plan and white space for you to fill in your own trading plans. Having a trading plan is one of the easiest steps that you can take to improve the profitability and consistency of futures trading plan examples trading but yet there are numerous traders who have never taken the time to write one down.
If you take an afternoon away from the charts to write your trading plan you will find that your trading becomes less stressful, more enjoyable and ultimately more profitable. The biggest benefit that a trading plan will provide is that it removes the decision-making process during the heat of battle. The first component of our trading plan will futures trading plan examples to write out what we expect to achieve from our trading.
Start with realistic expectations. For instance, a monthly goal might be to make 2. That may seem conservative but as I pointed out when writing about the realistic rate of return for a trading strategyif you can achieve that you are on your way to being a very successful and wealthy trader.
Alternatively your goal might be to not lose money for a Month. If you are already consistently profitable futures trading plan examples goal might be to reduce your weekly monthly draw-down while keeping your returns the same. Without goals being specific, you will have a hard time evaluating whether you are achieving them. It futures trading plan examples also worth giving yourself daily and weekly goals as well.
These should be unrelated to profitability but focused on the processes instead. For example, a daily futures trading plan examples might be to read at least one chapter of a trading book.
A weekly goal might be to study your trading journal before next week and make notes for improvement. Once your trading plan has clearly defined goals you need to start considering how you are going to achieve them.
There are some serious considerations required at this stage of the trading plan. Think about what your strengths and weaknesses are… Are you good at identifying Chart patterns or candlestick patterns such as the dragonfly and gravestone doji or inside and outside bar patterns? Are you good at reading financial statements? Futures trading plan examples you prefer getting in and out of positions quickly, or do you prefer having smaller positions with wider stop-losses?
Think futures trading plan examples the previous trades that you have made and try to remember what you found easy and what you have found hard. When writing out what type of trader you would like to be, make sure to give yourself an easier chance of replicating what you have previously found easy. There are 4 main types of trader; Scalping, day-trading, Swing trading and position trading. Ask a close friend or family member to tell you what they think your strengths and weaknesses are.
If they tell you that you are not good under pressure…. If they tell you that you futures trading plan examples highly disciplined, good for you…you might want to plan on being a day-trader. If you are analytical it might be worth planning on being a swing or position trader.
The type of trader you plan on becoming will determine to some extent the markets that you are able to trade. A position trader futures trading plan examples be able to look at a large number of markets whereas a scalper might only have the time to look at one.
As you probably know, I trade mechanical trading strategies and this enables me to analyse a wide range of markets in a very short time. If you are a discretionary trader you will obviously need to focus on a more refined number of markets.
Think how accessible the markets you plan on trading are too. If you want to trade American Penny Stocks, will you be able to access charts for them? Are the spreads and commissions too large for your account? If you are spread-betting you might futures trading plan examples that the spreads on certain futures markets are too large. Think about what you would like to trade…but make sure it is practical. This is related to the type of trader you have planned on becoming.
If your trading plan is to become a day-trader then you should specify the charts you will look at. Futures trading plan examples could be a 4 hr Chart to gauge the medium term trend, a 1 hr chart to gauge the short-term trend and a 15 min chart for your entries and exits.
If your trading plan is to become a Swing trader you might specify that you will look at weekly charts for the long-term trend and use daily charts for your entries and exits. The main considerations that need to be made are firstly what the financial strength and ownership structure of the broker is.
Brokerages do go bust! If you can choose a broker that is listed on a public stock exchange you will greatly improve the odds that you broker is financially sound. If the broker you choose is based in the Cayman Islands and owned by one or two people…I advise you to steer clear of it, regardless of the perks that they offer. If futures trading plan examples want to trade FTSE stocks…look for the brokers that offer the most competitive spreads. If you want to trade futures it is probably best that you find a broker that offers Mini-contracts.
If you have a small account and want to trade Forex, make sure that you find a broker that offers Mini or even Micro-lots. If your trading plan is to be a swing trader that uses Moving Averages, make sure that they are provided with the charts. If you intend on being a discretionary trader it might be worth looking for a broker that provides fundamental data on the markets that you plan to trade. The last consideration should be the perks offered by the broker. The most important things to consider futures trading plan examples how much you are willing to risk on each trade, what your entry signal will be and what your exit strategy will be.
It is also worth thinking about whether you only want to trade the long side, the short side or both. Further questions to ask yourself include…. Will you increase your position size if the account is up or will you decrease your position size if the account is down? Test any strategy before taking it live. Your daily trading routine will be largely determined by your chosen trading style and time-frame.
The shorter the time-frame you have decided to trade, the more planning and work is required. It felt as if I did enough day-trading to last a life-time at our old Prop-Firmso I am predominantly a long term-trader.
Having said that, I know that many of you would like to be futures trading plan examples. Most of the following points are for you. As I write this article Ben Bernanke is deciding whether to extend the Feds Bond Buying program…Trust me that professional day-traders plan on being mostly flat going into any Fed statements regarding Quantitative Easing.
On days with important news releases make part of your trading plan to exit all trades 10 mins before the release and re-enter if your rules permit once the statement or figures have been released. Make sure that yesterdays trades are logged. If you have left any trades open over-night you need to check whether you need to update the stop-losses or profit targets. Your plan should also leave time before the market opens to plot yesterdays high, low, open and close.
If your strategy is to day-trade small-cap stocks you should have a general idea of whether the broader market index is going up, down or sideways. Staring at charts all day without a break is bad for your eyes.
Put in a trailing stop-loss? Or do you plan on hedging your position with another market? The last part of the daily trading plan is to have your watch-list prepared before the market opens. Remember that a futures trading plan examples part of why you are writing a trading plan is to keep disciplined and remain stress-free while the markets are open.
Make sure that the assets you have short-listed as potential trades have all had futures trading plan examples key price levels updated and that the charts are easily accessible from your desktop. I also think futures trading plan examples a trader can benefit a lot from taking screenshots of the trades they placed. Snagit is a great tool for doing just that.
When you record your closed trades remember to include the entry price and exit price as well as the initial stop-loss and target. A simple spreadsheet in excel is sufficient for this part of your routine. Good habits are easier to maintain if the results are instantly tangible. Disclaimer - Forex, futures trading plan examples, stock, and options trading is not appropriate for everyone. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can guarantee profits or ensure freedom from losses.
Nor will it likely ever be. No representation or implication is being made that using the BacktestWizard methodology or system or the information contained within any BacktestWizard material will generate profits or ensure freedom from futures trading plan examples.
Create A Trading Plan Today! Trading Plan Template Please download a free trading plan template that includes an example of a completed trading plan and white space for you to fill in futures trading plan examples own trading plans. Leave A Response Cancel reply. Search For Financial Data.