Lot size and risk threshold Actually this has to be specified in your trading system, but your journal will help you to assess how comfortable you stand with specific lot sizes and risk limits. For instance, you’ve established your risk limit as 1.5% of total assets in any trade. Since you trade on the daily time frame – your lot size is 0.01-0.05, depending on stop placement. If you feel very uncomfortable with small cash profit and have no satisfaction from your hard work – this could let you shift to an time frame, or add cash to your account if your system is profitable. Otherwise, if your account 10 million USD and 1.5% risk looks small in terms of percent, but your journal tells you that you are psychologically uncomfortable with potential losses of 150 K USD in each trade – you may reduce trading lot size, or withdraw some part of your assets to feel more comfortable and relieve that mental pressure. Also if you have some limitations on loss trades in a row, especially within some period, your journal will show you that this is a time to take a break. Managing opened position This is also part of preliminary work that must be done prior entering the trade. When a trade is underway you will not have a lot of time to describe what you’re feeling and what you’re doing, especially if you’re a scalp trader. You will be able to make just few notes in process. So, this management plan should have three major points – where you will place your initial stop, your initial profit target and how will you manage position/stop loss order. For instance, you may suggest such plan as we’ve described with harmonic patterns: “Enter with two lots (0.75% total assets risk each) with initial stop 40 pips below 1.618 butterfly completing point. Exit first lot at 0.382 retracement target, stop moved to breakeven. Exit second lot at 0.618 retracement target.” So, you know all scenarios and how you will act with each of them. You will not get stuck on a question if the market will run against you “What do I have to do now? My money! Please somebody, help me!” Speaking about trading, you have to foresee and prepare in any potential trade as much as you can, work through any scenario and make a trading plan for every possible case.