Cryptocurrency Trading Plan

Cryptocurrency Trading Plan

In the last post, I spoke about strategies. Once you have your strategies worked out, you need to develop a good Cryptocurrency Trading Plan.

You know what they say – Failing to Plan is Planning to Fail – This could not be more true when trading any market. A good, sound trading plan will help you out in all situations so you can make cool, calm, predetermined decisions when you need to. If you follow it, your trading plan will help you greatly – Plan your Trade & Trade your Plan.

What is a Trading Plan

First of all, let’s get this out of the way your strategy is NOT your trading plan. Your trading plan is much more than just your strategy. Your strategy forms a part of your overall trading plan. If you want to know about Strategies, look at my post on Crypto Currency Trading Strategy.

If you can’t write down your plan, you have not got one. A trading plan is basically what it says, and it should be a plan of How you are going to trade. It should be thorough and include ALL details about your trading. I have mine written down as a word doc, I open mine up, and I read through it every day before I start Trading.

Why I need a Trading Plan

I will repeat it – Failing to Plan is Planning to Fail!

It really is that simple; trading is no different. Just like a sound business will have a good business plan you need to have a written plan if you want to be successful. Your Plan will guide you and help you have a successful trading business.

You need to write down your goals and your rules related to your trading. All this stuff should be predetermined before you start trading. It is no good being in a trade and then trying to work out what you will do. A good plan will help guide you and help you make good, sound decisions in the heat of the trading moment.

If you don’t have a plan, you will fail. It really is that simple so Let’s look at what you should have in your plan.

What should be in my Trading Plan

Your strategy should be in your plan, but your strategy IS NOT your plan. It just forms a part of your plan.

I will go through what I have in my trading plan.

  • Short Term Goals
    • Just list what your short term goals are. It will be different for everyone. In my short term goals, one of the things I have listed is that I will continue to execute “flawless” trades following my rules 100%
  • Longer-term goals
    • Once again, this will be different for everyone, but a long term goal could be to become a full-time trader. You should also write down the WHY this would be important to you. Try to be specific; this is important stuff.
  • Strategy
    • Now, this is where you write your strategy down. I use three different strategies depending on market conditions. Just write down anything related to your strategy here. You could also put stuff as you will only trade the top 25 market cap tokens because they provide higher liquidity.

And This…

  • Trade Mechanics
    • This is where I detail my strategy a bit more. I will write down stuff like where I will place my stops and targets etc. I also have details of how I will use a trailing stop. You should be thorough here and write down all the scenarios you can think of that might happen in the markets, then you will be repaired and have a plan when/if it does happen.
  • Risk
    • ALWAYS predefine your risk ALWAYS! This is the place where you write it down. I only ever risk between 1-2% of my trading bank on any one trade.
  • Schedule
    • Your plan should also include a procedure of how you will trade. You need to include things like the time you will trade, how you will record your trades when you review your trades etc. Just step it out like a schedule. Number 1 on my daily schedule is READ My RULES! Number 2 – I have written how I do my daily scan, keep stepping it out like this.

And This Too…

  • Undesired Outcomes
    • It does not matter how good you think you are; you WILL have trades go wrong. You need to have thought about this and have it written down what you will do when trades don’t go your way. For example, you might stop trading if you lose 3% in any one day. You can set weekly and monthly limit points as well. It is also important to write about how you will handle things after any of these limits are reached. You might have a break for 2 days before you start trading again. These are just example, you should come up with your own rules, but it is critical to write them down. You can always change them later on if they are not working.
  • My Rules
    • This is the place that I write my general rules down. For example, I only trade with the trend. If I am sick or not feeling right – Do NOT Trade. Never trade without a stop loss – EVER! You can write things like – Trade what you see, NOT what you think! I also have some quotes from Mark Douglas written down under my rules.

It is important to be detailed in your plan, so write it all down and review it regularly. Make changes if you need to but make sure you stick to your plan.

Why Do I Need to Follow my Plan

This one should be obvious, but I will say it again – Failing to Plan is Planning to Fail.

A good plan gives you an edge in the market, just like a good strategy. If you haven’t got an edge in the market, you are just gambling. A good plan will help your Trading Psychology and help you to make the right decisions in the market when you need to. There should be no big surprises because you have covered all scenarios and how you will deal with them. This way, you can approach these situations with confidence and make good decisions with no emotions involved.

Failing to Plan is Planning to Fail

I hope this post has given you an idea of writing your cryptocurrency trading plan and what you should have in it. If you have any more suggestions about trading plans or any questions related to trading plans, drop them in the box below and remember…..

Failing to Plan is Planning to Fail!

Crypto Dave

❗ DISCLAIMER: I am not a financial advisor. This is not financial advice. The content and material I provide on is my opinion only and general in nature. Always do your own research before investing any money. You should always understand the risks involved in trading and investing and seek advice from licensed professionals before undertaking any investments of your own.

14 thoughts on “Cryptocurrency Trading Plan”

  1. Yes. A trading plan is very necessary and it forms an essential part of our success. Surely, when one doesn’t have one, then definitely he’s gambling, and that’s what the brokers want so that we can loss more money to them. When I started trading Forex, I lost a lot because I couldn’t come up with a trading plan. Of course, a trading plan and a strategy are very different terms. I used to classify them as same. But later learnt it was not. To be a successful trader on any market, having a trading plan is a must.

    1. I am glad that you have learnt the importance of a good trading plan Kelvin. Do you still trade FX? I use to but I like the volatility better in Crypto and the market is 24/7.

      Crypto Dave

  2. I see, is it safe for me to assume that the trading plan is more like a blueprint for our trades? Interesting how every little element that contributes to the success of our trade is included in the plan, if my instincts are right, we could actually compile and sell those. 

    I was wondering, what use is adding risk limitation percentage there within the trading plan if we cannot control the risk when trading?

    1. Some good question there, let me start by saying that if we pre-define our risk we have total control when trading. We control exactly how much our total loss could potentially be if you have not pre-defined that you are just gambling.

      If we put ALL the small detail in our plan we take the human emotion out of our trading, we are just simply following our plan. Being consistent and sticking to your rules will bring success with the right strategy.

      It would be hard to compile a trading plan and sell it because everyone’s plan will be different, I guess you could make a generic one that people fill in the blanks but I have already mentioned in the article what it should contain.

      If you would like to see my plan just let me know and I would be happy to show you my plan and what it includes.

      Happy Trading

      Crypto Dave

  3. I like your list of items to consider in a trading plan. In fact, it feels like it can be applied even in non-trading circumstances with some adaptation. I used to trade without a plan and you are absolutely right, it is a plan to fail. I had big losses. Discipline is very important and a proper plan will help to regulate that.

    1. Exactly Richard, I too didn’t really have a proper plan when I first started, it cost me money as well.

      With the right mindset and a good plan you are miles in front of the average trader and yes I guess you could adapt the plan for other non-trading activities – Failing to plan is planning to fail, not just for trading.

      Crypto Dave

  4. Hello there, thank you so much for sharing this. this is a very awesome piece and a very detailed one. I’m really happy I came across this.  Reading about this article cryptocurrency trading plan sounds really exciting. I love cryptocurrency trading but I don’t know how to go through it but reading this article it was indeed helpful and a hand full of many things 

    1. Hi, Charity, It is a bit exciting and overwhelming when starting out in crypto I would highly recommend you start with this free trading course you will get a lot out of it and it has been written by one of the best in the industry just remember…

      Be the Best you can Be

      Crypto Dave

  5. Cryptocurrency Trading has turned out to be a very lucrative business with lots of people wanting to be part of it. Well, I happen to be among those who would love to partake in cryptocurrency trading, not only for the profit per say, but for the knowledge and experience too. This article will help me achieve this goal as it entails a great cryptocurrency trading plan.

    1. I am glad that you could take something away from this post but if you are keen to get started with crypto trading the right way I would highly recommend you start with this Free Course because experience does matter.

      Crypto Dave

  6. Hi Dave this is a great article with some very useful advice on having a trading plan. I’m definitely guilty of all the things you mentioned in your post – failing to plan, not sticking to my own rules, trading with my emotions. I’ve done it all and lost money of course! This is all in forex though, I haven’t traded crypto yet. Can it be done in the same way with a broker and a platform like mt4? 

    1. Hi Katie, Yes you can trade Crypto on MT5 not sure about 4 I used to do it on MT5 with eightcap brokers. If you are keen to start with crypto, I would recommend starting with the free course, and it will show you how to set up all your accounts and charts etc… for trading crypto, the platforms and exchanges I use are better than MT4 or MT5.

      Crypto market is 24/7, but my broker on MT5 only traded normal stock hrs. That is another reason I love crypto you can trade anytime you want.

      Be the Best you can Be

      Crypto Dave

  7. A really informative article and I completely agree with everything you say. There are far too many retail traders, especially in crypto that get absolutely rekt because they don’t have clear strategies or trading plans in place. The phrase you use “Failing to Plan is Planning to Fail” is so very true. I really like the disciplined approach that you take to trading and the rules that you set yourself, which is very smart indeed. 

    1. Hi Paul, I have been trading long enough to know the importance of a good trading plan and discipline.

      I thought I knew better when I stared and blew up multiply trading banks, it is only now with my strict checklist and disciplined approach, trading 100% mechanical that the real success has started to come. 

      It sounds like you have some good experience Paul what markets do you trade?

      Crypto Dave

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