If the plan doesn’t work in a demo account, it won’t work in the real world. Revise the trading plan, and then go back to the demo account to test out the changes. This process continues until a profit has been made for several months in a row. At that point, it is likely that the trading plan is a good one. The following tips will help you get your trading plan to that point. Quit trading for the day at a set time, and then have a routine for reviewing all trades taken. In terms of each trade, have a checklist you run through to make sure each trade aligns with your trading plan. Each day, take a screenshot of your chart, with all of your trades marked on it. On Friday, review the charts for the prior week, and note deviations from the trading plan. Note any areas of the trading plan that could be improved. Write down a plan for how to implement these improvements. This 1% risk, in dollars, is the account risk. The difference between the trade-entry price and the stop-loss price is the trade risk. Trade risk, multiplied by the position size, should be equal to or less than the acceptable account risk (1% of the account). Setting a more ambitious profit target offsets the larger stop-loss also used during such times. When there is little volatility, targets can be reduced, as stop-losses are also generally reduced during quiet times. Don’t let a mistake fester, bother you, or cause you to make more mistakes. Accept that mistakes happen, and then move your focus back to implementing your strategy. Our goal should always be to trade another day. If we let a mistake force more mistakes out of us, we could lose a lot of money in a hurry.
