Trading is not just about buying and selling; it is about making structured decisions at every stage. A trading framework provides this structure by combining the essential elements that guide a trader’s journey. From choosing the right instruments to defining a trading style, selecting execution methods, applying broad approaches, and building specific strategies, every layer adds clarity and discipline.
Without a framework, trading decisions can become random and emotional. With a framework, traders follow a systematic process — selecting markets carefully, applying strategies with consistency, and managing risk with discipline. This chapter explores the complete trading framework, covering products, styles, execution, approaches, strategies, risk management, and psychology. Together, these components form the foundation for a sustainable and professional trading journey.
Key Components of the Trading Framework
- Trading Instruments: The assets and markets you choose to trade.
- Trading Styles: The time horizon and frequency of trades.
- Trading Execution Methods: How trades are placed and managed.
- Major Trading Approaches: The broad logic behind trade selection.
- Trading Strategies: The rule-based systems that guide entries and exits.
- Risk & Money Management: Protecting capital and optimizing returns.
- Trader Discipline & Psychology: Building consistency and emotional control.