THE PILLARS.

2 PARTS OF A TRADING PLAN

• Risk Management Plan, Purpose, Objectives, Habits,Trade Windows.
• Risk management plan, backed up by realistic trading objectives, a powerful purpose and proper habits.
• Market Structure.
• The absolute foundation and essential of any market and strategy.
• S&D Concepts.
• The cherry of the cake, offering us precision and
high win rate.
 WHY DO YOU TRADE?

1. Why are you trading? Why do you want to trade?

1. What is your main driver for trading? I am sure it’s money, but then why do you need that money? Dig deeper!
2. Do you want to Support your current income or completely Replace it? Be realistic and honest.
1. I DO NOT advise to use trading as a full-time job/only income source.
2. Your ‘’why’’ is your driver in trading, which will keep you going in rough moments.
1. Spend some time digging deeper into that and really define ‘’why’’ you are trading or want to trade. There is no wrong answer. It has to
make sense to you and has to be authentic.
2. DETACH from all hype online. Trading is NOT what social media portraits it to be (cars, watches, beach trading, parties, etc).
 YOUR MONETARY GOALS

• There is always a difference between how much do you WANT to make (or THINK you should make) and how much do
you NEED to make. (but nobody tells you this)
1. How much do you Want to make? Per month/quarter/year? How much do you Think you need to be free?
1. Think of a number. Do you want to make 1 million this year? Or $10,000 this month? Write it down!
2. How much do you Need to make? Per month/quarter/year?
1. What are your monthly Living Expenses (LE)? There are five essentials usually:
1. Home mortgage/rent. Utilities for home. Food. Transportation. Insurance. Type all of those out per month then multiply x12.
2. How much are you currently earning from your job/business?
3. How much do you need to earn per month, to cover your LE?
4. How much do you need to earn per month to replace your job income?
3. Is there a difference between how much you Want and Need?
• Usually, there will be. That’s due to unrealistic expectations, bad money management, lack of wealth creation system
• The Need number is just for financial Stability/Security. The next stages of wealth are – Vitality, Independence, Freedom and Absolute
freedom. (do you want to learn about those as well?)
 YOUR MONETARY GOALS

• Once you know your Need number, you can brainstorm on your needed account balance to fulfill that.
• First, you will however need data – win rate, RR, average monthly return.
• Example:
• I need $1500 for my LE. I currently make $2000 from my job.
• I am great at generating on average 5% per month, consistently. (a conservative figure for some of you)
• To cover my LE, I need an account of $30,000 ($1500 / 0,05)
• To replace my job income, I need an account of $40,000 ($2000 / 0,05)
• Play with the numbers. What is your target account size? How can you get there? Make a detailed plan.
• Funding companies (you can scale them slowly – start from 5k to 50k (example)).
• Live account scaling with monthly deposits (https://www.thecalculatorsite.com/finance/calculators/forex-compound-calculator.php)
• What are the High Priority Actions that you can take to achieve your plan?
• This in terms of Actions, Habits, Routine, not Achievements.
 WHY IS RISK MANAGEMENT
SO IMPORTANT?
1. Trading is a business. In order to run a successful business, you need a Business Plan.
2. Without understanding risk management, you are doomed to fail. This is the core of the game and it is the tool that will
keep you playing long-term.
3. With correct risk management it is literally IMPOSSIBLE to blow an account or lose a big chunk of it.
4. It helps you obtain a growth and long-term mindset and not be stuck in short-term thinking and results.
5. It helps you manage your cash flows and expenses better. Remember – it’s a business!
1. Having a plan that tells you when to take cash, how much you will maximally lose, planning and mitigating future losses and forecasting
future growth makes your trading more stable and realistic.
6. It gives you an understanding of the type of person you are: Risk Averse, Risky, Conservative, Aggressive, etc.
1. Your plan should fit YOU as a person.
 RISK MANAGEMENT PLAN
GUIDELINES
• Your Risk Parameters:
1. Risk per trade. Look for the range within 0.25 – 1%.
2. Max (Percentage or Trades) Loss per day. Allow for at least 2-3 strikes per day!
3. Max Loss per week. Look for range within 3-6%.
4. Flatlining the drawdown criteria. (when will you reduce risk and step back; not mandatory)
5. Scaling profits criteria. (when will you allow yourself to take more risk; not mandatory)
• Profit Targets:
• You cannot go broke by taking profits. Introduce a Take profit and Partialing system.
• Depending on your goals, what return do you need? 5% for scaling, 8-10% for funding per month is ALL you need.
 RISK MANAGEMENT PLAN
EXAMPLE
• My Risk Parameters:
1. I risk 0.25% per trade on my live account.
2. My Max Daily Loss is 1% = 4 losing trades in a row. If I meet this, I STOP for the day.
3. My Max Weekly Loss is 3.5% = 14 losing trades in a row. If I meet this, I STOP for the week. (rarely happens).
4. Whenever my balance falls below 4%, I reduce my risk to 0.12% per trade. I only trade with this risk IF I am below 4% drawdown.
(that is to avoid digging a deeper hole if you go into drawdown). The moment I cross the threshold again (say 3.8% DD), I am back at full risk.
5. Whenever my balance increases above 5%, I increase my risk to 0.50% per trade. I trade with this risk AS LONG AS I am above
2% in profit. (this is to ensure I stay in profit and not go into Drawdown, but give myself the opportunity to scale bigger).
• When risk is increased to 0.50%, the Max Daily loss becomes 2% per day and Weekly Loss 7%.
• Profit Targets:
• Fixed TP at 5R when my SL < 5 pips. When SL > 5 pips – 4R TP.
• Monthly target of 5%.
 RISK TO REWARD RATIO

1. The only thing that is going to keep you in the game (apart from a risk plan) is Risk to Reward ratio.
2. This concept makes you the Casino. It doesn’t matter how much you lose, but how big are your winners when you win.
3. This is a foundational principle of trading, which illustrates the statistical/probabilistic part of it.

Source: Binance
 WHY IS WIN RATE IMPORTANT

1. Knowing your ‘average’ win rate is helpful, as you can plan for losing streaks and tweak your risk plan accordingly.
2. It also shows you what is the minimum RR you need in order to come up profitable.

Source: FTMO
 MY STATS

1. Fixed RR of 5R on every trade. (sometimes I take 4R, depending on structure or 3R when market is ranging).
1. Often times I take partials at 3-4R, just to secure profits. Hence why my
profit factor is 2.5.
2. I also tend to decrease my risk on what I perceive to be “low quality” trades.
Both of those are psychology issues that need polishing.
2. Win Rate of 35-48%.
1. Shown win rate is 54%, because of partials, as they count as separate trade.
 TIMING AND PAIRS
• The Trading Window and Pairs are your decision!
• Make sure to fit Trading according to your Lifestyle. Not the other way around.
• My favorite trading session is from Frankfurt Open (8 AM GMT+1) till London Lunch (12PM GMT+1) time. 4-hour window.

• The Pairs:
• Keep your list small. LESS is MORE.
• Start by backtesting a few, gather the data, see which one has best results and resonates with you the most.
• For DayTraders, I suggest max 3 instruments. For Swing Traders – you can trade as many as you can follow.
• I trade EURUSD and US30 only.
• Pay attention to your currency pair and its most volatile session.

• The best approach (for me):

• Once you have a strict plan and strategy, you know your Areas of Interest. Set alerts at those zones and just wait.
• Once alert is pinged – you focus and look for entry setup.
• Little screen time = High quality of trades.
 HABITS AND ROUTINE
• Proper Habits, Specific Actions and Discipline is what will build you as a Successful Trader (and person).
1. Morning Routine.
1. Wake up earlier. Hydrate. Energize with some exercise. DO NOT wake up and sit on the screen immediately.
2. Mediate. Make sure you get in a neutral mind state, before you jump on the charts.
• If you carry negative emotions from past days, you will not perform well today.
2. Chart Prep and Trading.
1. Once in proper mindset, sit down and perform your analysis. Set alerts and it’s action time!
3. Mid-Day Recap, Chart Update.
1. Take a break mid-day to refresh. Then come back at the screen, update the charts and it’s action time again.
4. End of Day Habits.
1. Journal ALL of your trades, your PnL, emotions, performance, etc. Evaluate yourself. What can you learn and improve on?
2. Perform and End of Day markup – re-analyze the day’s price action and spot any setups you missed. Journal them.
5. Sleep
1. Make sure to get enough sleep, so you are well-rested and focused for tomorrow.
 HABITS AND ROUTINE
• “A professional trader’s life is Simple and Structured.” Anton Kreil
• You cannot Focus and win against the best traders out there if you have a busy/hectic/unorganized life.
• You cannot Improve and become a better trader if you do not monitor your progress.

• How can you measure your performance? How will you evaluate yourself at the end of the day/week?
• What kind of habits will you adopt?
• What specific actions will you take to achieve your goals?