Trading Plan

A guide to what you should think about when trading

Plan Type

Buy or Sell

Name or Code

Write here the name of Index, Commodity or Company name/code that you want to trade


  1. Introduction
  2. Profit Objective
  3. Strategy
  4. Pros & Cons
  5. Stock Selection
  6. Stock Screening
  7. Analyst Opinions
  8. News Research
  9. Technical Analysis
  10. Entry point
  11. Stop loss
  12. Exit Point
  13. Comments and Lessons Learnt
  14. Disclaimer

1. Introduction

Writing a comprehensive plan is time consuming and often difficult to find the starting point. A simple plan could take years before it is complete, understood it and followed through.

This guide provides a structure to create a trading plan.

2. Profit Objective

Simply state your objective. For example, to make a return of 2% per trade

3. Strategy

Write down your strategy. For example, gap trading.

4. Pros & Cons

State what the pros and cons are of your strategy.

Eg low gain



Eg lower risk

5. Stock (Currency, Commodity, Index)


There are thousands of companies to choose from, but are they suitable to your trading style? You must understand where you put your capital so stock selection is crucial. How does the company or sector operate? How are profits made and what factors affect the share price?

Write down how does the company or sector operate?  How are profits made? What factors affect the share price? Eg energy prices, commodities? Is demand for the company’s product/service likely to increase? Are there any mergers or takeovers planned? How does the price react to new contracts? Anything else which affects profitability?

6. Stock (Currency, Commodity, Index)


Stock screening is not a perfect science and we know that past performance is not a guarantee for future results.

You screen stocks with your own spreadsheets or use online tools like the one from Google

The most common criteria to compare are P/E ratio, Growth and Dividends. Make sure that you are familiar with screening criteria so that you can take right decisions.

Write your stock screening result here. What were your criteria and what are your expectations in term of performance.

7. Analyst Opinions

When selecting stock it is valuable to check what other analysts think. Some stockbrokers will have general stock overview and usually will include a section on forecast and/or recommendations on the stock.

Write what other analysts’ forecasting and recommendations here.

8.    News Research

Check latest financial reports, news or events that will influence the company share price. For example, is the company going ex-dividend or has it already distributed dividends? Note that share prices usually go down when companies declare dividends.

Are there any announcements pending? Have there been any recent news about profit and losses? Check earning reviews, and how they compared to expectations.

Write down any company news or announcements which might affect the share price  

9.    Technical Analysis

Technical analysis brings you closer to the buying point and is more about where the share price is in relation to its future potential, up, or down trend.

This is where charts are relevant.

Paste examples of your technical analysis (chart samples) and when you expect to trade. What indicators are you using?

10. Entry point

There is nothing more important that a rightly time entry.

Decide your entry point(s) and how you will enter the market.

State your reasons why you will be entering your trade at this point. How will you buy your CFDs/shares? At once or in different lots. If possible mark in the chart where your entry point(s) will be

11. Stop loss

Whether trading CFDs or shares, it is important to know when to stop your losses.

It is difficult to decide how much to lose. If you have done technical analysis and research in place, you should probably have an idea where it will be worthless to keep losing. This is especially true if the share price is on free fall or is just reacting to global uncertainty.

Many CFD and share providers have compulsory stop losses in place but they may not suit you, so make sure that you know how to use your stop loss tool.

Write at what price will you set your stop loss and how much you are prepared to lose

12. Exit Point

Decide your exit point(s) and how you will exit the market.

State what price you expect to close your position and if you’ll close it all at once or in bundles. If bad news is released, what is your plan for an exit point? List all possible reasons for closing the trade before achieving your target and any reasons to hold on to your position.

13. Comments and Lessons Learnt

Write down you experience during your trade and what the outcome was. Did you achieve your objective? What lessons did you learn for your next trade?

14. Disclaimer

IMPORTANT INFORMATION: This document is intended as guide only. The author not assumes responsibility for damages resulting from the use of the information contained herein. The document does not guarantee results. Use this information at your own risk. Professional advice is recommended.

Let’s get started...

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Risk warning: Your capital may be at risk. CFD trading is suitable for experienced traders and not beginners.