Before trading in the financial markets you must have a trading plan . This plan will tell you how to run your trading system and your real-time trading strategy .

The trading plan forces you to have discipline and consistency as a trader, allowing you to better manage your emotions and drives.

Below are 21 questions you should ask (and answer) before you start trading for real money:

  1. Which markets will you operate?
  2. At what timeframe are you going to trade?
  3. What will be your input signal?
  4. What will be your exit signs?
  5. Will your stop loss be at a level that avoids the “noise” of the normal price action so that it is activated only when you are proven wrong?
  6. Are you going to use trailing stops to maximize your earnings?
  7. Will you have profit targets or will you leave the winning trades open?
  8. Did you test back your entries at different times in the market?
  9. What size your home position for operation?
  10. What will be the maximum loss per trade?
  11. What is your annual return target?
  12. What will be your maximum drawdown ?
  13. What will you do if your maximum drawdown is reached?
  14. What is the expected hit rate?
  15. What is the expected reward / risk ratio?
  16. How many positions can be open at the same time?
  17. What will be your maximum exposure?
  18. Are you going to change the size of your positions based on volatility?
  19. Are you going to use leverage / margin?
  20. How much leverage will you use?
  21. Will you keep a record of your performance to evaluate the quality of your performance?

Here are some questions to help you find the answers that fit your personality, goals, and risk tolerance. Your journey as a trader should start with them.