1. Define an entry strategy. Whatever the criteria used to take a stand, technical indicators, price action, economic news, chart patterns, trend line ... etc. the trader needs to identify and define what constitutes for him a good market entry. It can also list multiple configurations in order of quality (A = B = perfect entry average input etc. ...)
2. Determine the risk / return ratio of any configuration of trading potential.
3. Adjust the size of the trade position to define the distance necessary protective stop and not vice versa! You should never adjust the stop to get a size desired position.
4. Know the exit strategy before entering the trade. The trader should know precisely what to do with his position and the best time to make an objective decision is before taking a position on the market.
5. Remain objective at the end of trade. The trading plan must provide for a mandatory activity to do after closing a trade. Emotions can be harmful after a trade, whether winning or losing. Feelings of revenge and disappointment can prompt the trader to take unnecessary risks and to rush back on the market with a state of little enamored goal. After a winning trade, it is very easy to feel overconfident and the trader can then in a moment of euphoria to a new trade, but with a greater level of risk. With such behavior, the benefits are doomed to evaporate in a flash
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