For me, having a solid trading plan is everything. It keeps me grounded, consistent, and focused on the process instead of chasing quick profits. My plan defines my goals, risk tolerance, and how I approach the market each day. Without it, emotions take over — and that’s when bad decisions happen.
5.1 Trading Goals
I’ve stopped trading with monetary goals. Chasing a dollar amount only leads to overtrading or forcing setups that aren’t there. My only goal each day is to execute my playbooks flawlessly. If I do that, the profits naturally follow over time.
5.2 Market Preparation
Preparation is everything. I wake up early, clear my mind with exercise, and then head to my desk for the following:
- Analyze overnight price action and market conditions.
- Plot my critical Supply/Demand and Support/Resistance zones.
- Check the economic calendar for major news releases.
- Set up my charts.
- And then, it’s time to make money!
Following this same routine, every single day, is non-negotiable. Being prepared is the key to trading confidently and avoiding those random, impulsive entries.
5.3 Trading During News Events
Big news events like Non-Farm Payrolls (NFP) or CPI can move the market unpredictably. I stay out during those times — the volatility can wipe out good setups.
If I’m already in a position and news is about to hit, I usually move my stop-loss to breakeven or just close the trade if price is near my entry. Protecting capital comes first; there will always be another setup later.
5.4 Risk Management and Position Sizing
Before I even think about clicking the button, I check the risk-to-reward (R:R) ratio. I look for setups that offer at least a 1:2 R:R. This means I’m aiming for twice the reward compared to what I’m risking.
I also meticulously size my position so that the total risk on the trade stays within my predetermined small percentage cap.
For example: If I see a long opportunity in /ES at 5030, my stop is at 5025 (5-point risk), and my profit target is 5045 (15-point reward). That’s a phenomenal 1:3 R:R. If the risk-to-reward isn’t appealing, I either avoid the setup entirely or enter with a smaller size.
Your job as a trader isn’t to predict every move. It’s to manage risk, follow your edge, and stay consistent. The rest is just a result of doing that well.
I’ve posted separate articles on this topic, check it out
Don’t take unnecessary trades/ Over-trading