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MadCharts Trading Plan

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158 views11 pages

MadCharts Trading Plan

Knowledge

Uploaded by

btbdele
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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MadCharts Trading

Plan
Welcome to your journey with MadCharts Trading Plan. We will dive into the
fundamentals of successful trading, exploring the essential components of a
well-defined trading plan, and unraveling the secrets of trading rules and
discipline. By implementing these strategies, you can unlock your potential
as a trader and navigate the market with confidence.
Importance of a Trading Plan

1 Clarity and Direction 2 Emotional Discipline


A trading plan acts as your compass, guiding your Trading can be emotionally charged, and a well-
decisions and keeping you focused amidst market defined plan helps you stay grounded. It prevents
volatility. It outlines your trading objectives, impulsive decisions based on fear or greed,
strategies, and risk management measures, ensuring you stick to your strategy and maintain a
providing a clear roadmap to follow. rational approach.

3 Consistent Performance 4 Improved Risk Management


By adhering to your trading plan, you establish a A robust trading plan incorporates risk management
consistent framework for your trading activities, principles, defining entry and exit points, stop-loss
enabling you to identify patterns, make informed orders, and position sizing. This helps you control
decisions, and improve your overall performance your losses, minimize risk, and protect your capital.
over time.
Key Components of a Successful Trading Plan
Market Analysis Trading Strategy Risk Management
Thorough market analysis is crucial Define your trading style and Develop a comprehensive risk
for identifying trading opportunities. choose strategies that align with management plan that outlines your
This involves understanding market your risk tolerance and investment maximum loss tolerance, position
trends, analyzing technical goals. This could include trend sizing, stop-loss orders, and profit
indicators, and researching following, scalping, or swing trading, targets. This helps you control risk
fundamental data to gain insights among others. and protect your capital.
into market behavior.
Trading Rules and Discipline
1 2 3 4

Entry Rules Exit Rules Position Sizing Trade Management


Establish clear entry rules Define exit rules to Calculate the appropriate Develop a strategy for
that determine when to determine when to close position size for each managing open positions,
initiate a trade based on a position, whether trade based on your risk including trailing stops,
pre-defined criteria, such based on profit targets, tolerance and account taking profits, and
as price action, technical stop-loss orders, or balance, ensuring you adjusting positions based
indicators, or changing market don't overexpose on changing market
fundamental analysis. conditions. yourself to risk. conditions.
Hidden Gems Proven Trading Strategies
:

Breakout Trading Trend Trading


Identifying and trading breakouts of key price levels or Riding the trend is a fundamental trading principle that
resistance zones can offer profitable opportunities. involves identifying and following the prevailing
This involves observing price action, volume, and direction of the market. Trend trading strategies often
other indicators to determine potential breakout utilize technical indicators like moving averages.
points.

Technical Analysis Fundamental Analysis


Utilizing technical indicators like moving averages can Analyzing macroeconomic data, company earnings,
provide insights into market sentiment, potential and industry trends can help you identify potential
reversals, and overbought/oversold conditions. investment opportunities or anticipate market shifts.
Leveraging Market Insights and Trends

Stay Informed Regularly monitor financial news, economic data


releases, and industry reports to stay updated on
market trends and potential catalysts.

Identify Key Levels Utilize technical analysis to identify key support and
resistance levels, breakouts, and trendlines to guide
your trading decisions. Essentially areas of high
volume.

Analyze Market Sentiment Track investor sentiment through news articles, and
market indicators to gauge market psychology and
potential shifts.

Consider Seasonal Patterns Recognize seasonal trends and patterns in markets,


such as year-end rallies or summer slumps, to
capitalize on these recurring occurrences.
Emotional Intelligence in Trading

Control Fear and Manage Emotions Embrace Patience Accept Losses


Greed Acknowledge and manage Trading requires patience Recognize that losses are
Avoid making impulsive your emotions. Recognize and discipline. Don't chase inevitable in trading.
decisions driven by fear or when you're feeling losses or rush into trades. Accept them as a part of
greed. Stick to your trading anxious or overly confident Wait for the right the process and learn from
plan and maintain a rational and take a step back to opportunities and be them to improve your
approach, even amidst avoid irrational decisions. patient with your trading strategy and decision-
market volatility. strategy. making.
Continuous Improvement and Adaptation
Track Performance 1
Keep detailed records of your trades and
analyze your performance. Identify areas for
improvement and track your progress over time. 2 Review Strategies
Regularly review your trading plan and
strategies to ensure they remain relevant and
Seek Feedback 3 effective in the evolving market landscape.
Seek feedback from experienced traders or
mentors to gain insights and perspectives that
can enhance your trading approach. 4 Embrace Change
Be adaptable and willing to adjust your
strategies as market conditions change.
Embrace new tools, technologies, and insights
to stay ahead of the curve.
MadCharts Do s When Trading ' " ' " :

☄ SUNDAYS Look at the markets and jot down the fundamental events for the week.
:

☄ MONDAYS Input description and numerical values of past trades in Trading Journal.
:

☄WEDNESDAYS Input description and numerical values of past trades in Trading Journal.
:

☄FRIDAYS Input description and numerical values of past trades in Trading Journal.
:

☄ Before Trading: Place stop-loss and Take-Profit and calculate the outcome + spreads and commission payment.
☄Before Trading: Look at notes for potential trading news being released and read up on Bloomberg/Forex Factory
about potential outcomes for the economy and how it will affect my trade.

☄ During Trading: Calculate stop-loss value and take-profit value and see if it makes sense, contact account manager
of broker to see if they have the same values so that no hiccups will occur. "GIVE ME MY MONEY!"

☄During Trading: Create 3 anticipated movements or potential outcomes of my trade. Then, turn on my alerts on my
phone, turn off my computer and walk away.

☄After Trading: Input trade outcome in my trading journal, don't get emotional, move on to the next trade.
MadCharts Dont s When Trading
' " ' " :

DON T Trade when you did not have a good night s rest
' ' .

DON T Trade when you are happy sad or angry


' , .

DON T Trade when you have too much going on in your personal life
' .

DON T Trade when your kids or wife is ill


' .

DON T Trade on NFP Friday


' - .

DON T Trade before you did your daily Bible Study


' - .

DON T overleverage or risk more than your anticipated risk percentage


' - .

DON T turn on your computer before your alerts go off


' .
RISK PARAMETERS AND PLAN
SMALL ACCOUNT MEDIUM ACCOUNT LARGE ACCOUNT

DESCRIPTION Daily Trading, used for Has to have 4 out of 7 Has to have 7 out of 7
small household purchases confluences before trade confluences.
and daily life transactions taking a trade. Used for Used for investment
for kids and house. This is bigger weekly purchases portfolio, vehicle or
my Salary Account. and medical or unplanned other asset
bills. purchases.

% RISK 8-10% risk per trade 5-7% risk per trade 1-4% risk per trade

MIN/MAX R:R 1:1 minimum RR 1:2 minimum RR 1:4 minimum RR

TRADE ENTRIES Impulsive entries and Breakout Trades, MadStrat, Madblock


breakout trades MadStrat and Madblock and fundamentally
entries driven entries. Always
wait for retests as
extra confirmation.

TRADE EXITS 1:1 RR place SL at 1:1 RR place SL at After 10 pips profit,


breakeven and close 50% breakeven and close 25% place SL at
of profits. After 10 pips of profits. Close 50% of breakeven. Close
profit, add extra position. trade when 50% in 50% of trade when
Higher Risk. Close 50% of drawdown. 50% in drawdown.
trade when 50% in
drawdown.

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