MINDFLUENTIAL
TRADING
You'll also get
Trading Journal on Page 9
2 Trading Psychology Books on Page 11
Comprehensive Trading Plan
This document outlines the structure of a professional trading plan,
covering goals, strategies, risk management, and psychological
preparedness.
It’s divided into 9 steps as below.
1. Trading Goals
2. Trading Strategy
3. Risk Management
4A. Position Sizing
4B. Capital Allocation
5. Entry and Exit Rules
6. Trading Journal (downloadable)
7. Review and Adapt
8. Trading Psychology Books (downloadable)
9. Contingency Plan
Bonus - Take your Trading Skills to the Next Level
1. Trading Goals
Your trading goals should define what you aim to achieve through trading.
Be specific and measurable.
For example:
Short-term: Consistently achieve an average return of 5% per month over
the next 6 months.
Medium-term: Build a trading account worth Rs. 5 / 10 lakhs in 2 years.
Long-term: Transition to full-time trading within 5 years while maintaining a
20 to 40% annual return (this completely depends on traders skills)
never keep daily / weekly goals, the minimum is 6 months.
2. Trading Strategy
Outline the strategies you will use, including their rules, for eg:
- Fake crossover strategies (only after there is pullback & continuation)
- Breakout and Breakdown setups (wait for Fakeout Confirmations)
- Order Block / FVG-based entry for Swing Trading in Stocks
- Expiry Day strategies for Index Options (Butterfly / Zero Hero)
- Price Action setups with Support and Resistance etc.
3. Risk Management
Detail how you will manage risks to protect your capital. Example:
- Intraday risk per trade: 1-2% of main capital
- Max risk per day: 3% of the main capital
- Swing risk per trade: 1-3% of main capital
- Use stop-loss orders for every trade.
- Have daily/weekly & monthly drawdown limits.
4A. Position Sizing (very Important)
Use position sizing to calculate the number of shares or contracts per trade:
For Cash Market Trades
Step 1 : Position Size = (Main Capital x Risk %) / (Entry Price - Stop-Loss Price)
Step 2 : You can buy the number of shares you get from Step 1 or less than that but
not more than that.
Step 3 : In cash market swing trading, sometimes we need to take less quantity than
what we got in Step 2, will explain that concept in Capital Allocation section.
For Futures & OptionsTrades
Step 1 : Position Size = (Main Caital x Risk %) / (Entry Price - Stop-Loss Price)
Step 2 : Step 1 value / Respective Lot Size
Step 3 : Let’s say the Step 2 value is 2.3, you can take 2 lots maximum.
4B. Capital Allocation
This is specific for Swing Trading in Cash Market
Usually, we should not keep more than 20% of our capital in one stock. Say if you
have 2 lakhs capital, you should not allocate more than 40k for one stock.
For eg: say you want buy Zomato stock at 300 and stop loss is at 290 (10 points),
now and you want to risk 2% of your capital (4000), so as per the position sizing
calculation explained in above page, you can buy a maximum of (4000/10) =
400 stocks.
To buy 400 stocks you need (400*300) = 1,20,000 but as per capital allocation
rule, you can’t allocate more than 40k,
So your revised position size will be 40000/300 = 133 stocks.
Many traders ignore this concept and end up keeping entire capital in 1 or 2
shares and increase their risk.
5. Entry and Exit Rules
Entry Criteria
Clearly define when to enter a trade:
- Entry trigger: Price breaks above resistance with high volume.
- Confirmation: Bullish candlestick pattern (e.g., engulfing).
Exit Criteria
Specify exit rules for both profit and loss:
- Target: Exit when the price hits 1.5x risk-reward ratio.
- Stop-Loss: Exit if the price falls below support or hits a trailing stop.
6. Trading Journal
Commit to recording all trades for review and learning. Include details such as:
- Entry and Exit Prices
- Position Size
- Profit or Loss
- Trade Rationale and Notes
- Lessons Learned
Click here to download our excel trade journal.
Once you update your trade details, the journal will automatically calculate your
average:
✅ Risk Reward Ratio
✅ Win Rate
✅ Return on Investment
When they turn red, it indicates that your trade performance is getting bad so
that you can act quickly
7. Review and Adapt
Set a regular schedule for reviewing your trading performance and plan:
- Weekly Reviews: Analyze trades for strengths and weaknesses.
- Monthly Adjustments: Refine strategies and risk parameters based on
market conditions.
- Annual Goals Review: Align trading goals with performance and market
trends.
8. Trading Psychology
Develop a strong mental discipline to handle emotions during trading:
- Avoid overtrading and revenge trading.
- Practice mindfulness or meditation to improve focus.
- Keep a balanced lifestyle to reduce stress.
My advice is, to keep your position size in control and take as few trades as
possible, and you will see automatic improvement in your emotions in
control.
Two best books on Trading Psychology that you must read are:
✅The Best Loser Wins (by Hom Hougaard)
✅Trading in the Zone (by Mark Douglas)
Click here to download full PDF version of these 2 books
9. Contingency Plan
Prepare for unexpected events:
- Have an emergency fund separate from your trading capital.
- Stop trading during extreme market volatility or personal stress.
- Always have a backup broker in case of platform issues.
Always remember to keep your long-term investments or SIPs running and
not rely solely on trading income; otherwise, you are more likely to make
emotional mistakes.
Start with less trading capital and gradually increase it by 30% each time as
you gain experience and confidence.
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