Trade plan how traders use it
When the trader novice studied the peculiarities of the market and picked up for himself the trading system, he immediately breaks down to trade. But there is another step that no experienced trader will advise you to miss
Trade plan: how traders use it?
When the trader novice studied the peculiarities of the market and picked up for himself the trading system, he immediately breaks down to trade. But there is another step that no experienced trader will advise you to miss. This is the development of a trade plan. In this article we will talk about what it is and why it is so important.
What 's a "trade plan"?
A trading plan is a described algorithm of actions that you will follow based on the trading situation. These are trading methods and practical trading tips that are designed to help you make a profit.
Thanks to this list of actions you will always have an answer to the question of what to do in a given situation, so that the bidding ends as much as possible for you.
By creating a business from scratch, each person creates a business plan that describes their goals, aspirations, and detailed steps to achieve them.
The same applies to trading. If you have a clear goal in the market, some trade plan - to achieve this goal becomes easier.
However, it is not enough to draw up a plan of action alone. Discipline, care and strict adherence to the rules described are required.
Only with a trade plan will you be able to estimate how close you are to your goal.
Another undeniable advantage of creating a trade plan is that thanks to it your money will be safe even in a situation when you do not know what to do and emotions have taken over you. After all, it is not necessary to break your head and come up with a way out of the situation - it is only worth looking into your list and acting according to the plan.
We make the trade plan
There are no special restrictive rules on the drafting of the plan, this depends primarily on the characteristics of the person himself. However, it can be conditionally divided into several main parts:
Features of business;
In which market you will work;
What is the news background for the tools chosen by the trader?
What patterns and formations the trader will track and practice;
Maintenance of the transaction (what actions the trader will take if the market goes against his open position);
How the trader will control the risks (what in relation to the trade plan the risk is on: deposit, transaction, trading session).
First of all, the trader needs to determine in what market he will work: Stock. urgent or currency. This globally defines st
The personal part of the trading plan consists of the trader 's wishes. Here will be described his goals, motivation and how he sees the way to his dream. There is no place in this part for the technical aspects of trade, but only for the aspirations and expectations of its process.
The second part - business features include descriptions of the knowledge and skills of the trader, which he plans to use in trade. It is important to aim to improve skills and then track progress not in money, but in the experience you have received and the number of profitably closed deals.
Also in this part it is worth noting its disadvantages and describing gaps in knowledge about the market, so that in practice they do not cause monetary losses.
The trading part of the plan is a clear description of the trading process itself: the choice of time frame, the main strategy, the trading volume with which you can enter the market. Decide which part of your trading account you will use during the trading process. Even the profit you expect to receive needs to be included in the trading plan.
All the negative conditions that you can meet in the market are important to anticipate - so you can avoid an unpleasant surprise and be ready for any reversal of events, knowing how to do the right thing.
Once the plan has been prepared, trade can finally begin. However, do not forget to record your actions so that after you can compare the current state of affairs with what you originally planned.