Trading plan
What is a trading plan?
A trading plan is a set of
rules that cover all aspects of trading,
Define clear what you should
do and how and when
Trading plan that reflects
your personality as trader
Capital Management
The way you work
Previous mistakes
Notes
Goals
Trading plan should not be
large or many details by the start but can start as simple as a list of small
private functions in a way that your business steps your business in the market
Why should there be
trading plan?
Control your emotions
Because
emotions sometimes intervene to trade and be the leader of the shops and this
often happens if there is no plan built sets all the rules and steps Mtagerth
and help him to make a decision based on the movement of the market and not
based on personal emotions
One of the biggest benefits
plans trading it helps trader not to repeat the mistakes and stay away from
deals uncertain and based upon less than deals losers and protect stores that
turns system of trading to a semblance of the game Snakes and
Ladders where trading much winning and losing and winning and losing even out
eventually either gain very little unworthy including his effort and time, or
even in some cases the result is a loss after he had a high profit rate and based
upon shifting from a sniper opportunities to prey to loss
Because he was not able to
make a decision when stays out of the market and follows the policy of certain
number of transactions less but with greater strength better than random entry
and without the benefit of the weak deals
With trading plan every
decision or action has a role and a specific time, so even the most difficult
cases, shops remains committed to his plan and does not need to think about the
decisions you may discover later that it caused the loss of
Failure to develop a plan,
means that you are planning to fail
The difference between
the modus operandi and trading plan
Modus operandi /
determine entry and exit signals from the market and are usually part of a
trading plan as a whole as one of several other basic rules
Trading plan / include
All about trading (modus operandi - risk management – work time - target daily
/ weekly / monthly / yearly) everything
Steps to create a
trading plan
Basic rules
Public-private trading rules
must not be bypassed and may be based on personal feedback errors occurred in
advance
such as when entering a market not to deal
manual intervention based on emotions will be committed pre-defined exit points
Special Notes work in a
manner approved by
It is recommended that these
observations are placed elsewhere clearly visible in front of stores to remind
Permanent It can be used to put it on the screen or the desktop
Psychological and
physical preparedness
Mental state Are you a
good mood allows you to trade?
Did you get enough sleep
and rest?
If you do not answer to both
questions is yes then it is better not traded this day because you're not
ready, otherwise you will risk that the ratio of the failure of your transactions
for the day higher than any other time
Preparation
Preparation for a day / week
a new work
Preparing for a new work,
whether on a daily basis or weekly is one of the most important steps of the
trader where the professional building a general idea of the events
anticipated for this period and the most important economic data is expected to
be issued and the extent of its expected impact on the movement of prices,
On the other hand, is
preparing its own chart (identifying the most prominent points of support and
resistance expected - determine the general direction of the
Setting Target
Target profit for trading is
placed by trader themselves according to his conviction and are advised to be
average and achievable depending on the nature of trader himself
even a support to him and not
a source of frustration in the absence achieved with faith full that
livelihoods in God's hands alone, but set a goal is essential in order to be an
incentive for trader to reach him and commitment to the plan set
Target are divided into two
parts, the Target for the short term (weekly / monthly) gradually going down to
the second part, a long-term goal (half yearly - Yearly
Plan includes trading to
determine the method of portfolio management, which includes the identification
of points, such as the rate of profit to risk and which must not be less than 2
to 1 Any profit twice the proportion of risk so that the final result profit
even if permeation deals some deals losing because the loss is an integral part
of the market
Determine the number of
transactions that are entered into by the method used and the percentage of
loss that can accept them out of the example portfolio contains $ 1000 capital,
accept owner risk losing $ 100 maximum during the day and uses the method gives
the signal to two signals per day in this case is divided amount of $ 100 on
the number of opportunities 2 = $ 50 max for each transaction loss
Determine a plan for the
withdrawal of profits or reinvested and dates Payouts monthly / quarterly
Modus operandi used
The action plan contains
illustrative explanation of the method used and the steps how to analyze the
market and signs of entering extraction
Determine the mechanism out
of the deal Balhalten profit / loss
Couples used
Notes from previous
opportunities (previous mistakes - accumulated experience)
Work time favorite way
Codification deals
Very useful to add part of
the action plan to identify the results of transactions and observations
To take advantage of the deals
coming to avoid past mistakes
Also benefit assessment
method used and whether you need to be further developed
Ultimately must reflect the
plan trading personality as trader and not anyone else what works with you may
not fit with the others, and vice versa and this is one of the biggest mistakes
that traders novice when judged on the same or even the entire domain failed
because he was unable to make a profit in the same way work employs another person
and achieve huge profits touted by everyone, look for yourself and what works
for you so you can achieve succes
how to make extra money
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