What exactly is your entry signal going to be? Based on what back testing or trading principles?
Will you wait for a move in the direction of your trade or buy based on a technical indicator?
Will you have better odds of success buying dips in bull markets and shorting strength in down trends?
Risk/Reward: How much are you willing to risk? How much could you make if you are right? Is it worth it?
Winning Percentage: What are the probabilities that this entry will be a winning trade? With the winning percentage in mind how big do the winners have to be and how small do you have to keep the losers for the trading system to be profitable?
Where should your stop be? At what price level will your entry be wrong and signal you to exit the trade with a loss?
How big of a position size should you take based on your stop level and total capital you are willing to risk on this one trade?
Is your position size small enough to enable you to hold the trade without emotions effecting your ability to follow your trading plan?
When you open this trade in addition to your other positions, how much of your total trading capital is now exposed to loss?
Does this entry fit into my written trading plan or is it emotional or ego driven?
