Get started

Tradingplans

MAIN ELEMENTS OF YOUR TRADING PLAN | Trading Basics 📝 Hey traders, One month ago I wrote an article about the importance of a trading plan. Now it is time to discuss what should be inside your trading plan. Before we start let me note that a trading plan is a very personal thing and depending on your personality you may have some other elements. In this article, we discuss key elements that must be in every trading plan. 🔰Trading Strategy. I want you to realize that a trading strategy is not a trading plan. A trading strategy is simply one of its main elements. A trading strategy defines a set of rules and market conditions that one is looking for to open a trade and then manage that. 🔰Trading Time. Relying on your trading strategy you should know exactly when you trade. The time range must be precise and fixed. If you think that today you can trade the opening of the London session, tomorrow the Asian one, and then the US opening, I have very bad news for you. Your trading hours must be fixed and objective. 🔰Trading Instruments. As with your trading time, you should have a fixed trading list. A set of financial instruments that you monitor on a daily basis. 🔰Trading Journal. You should learn to journal your trades. Just a single performance is not enough. You should note the exact market conditions that made you open the trade and many other factors that you consider to be important. Then learn from your mistakes and improve your trading strategy based on your journal. 🔰Risk Management. Having the best trading strategy in the world one can fail simply because of neglecting the rules of risk management. Define your risk per trade, maximum drawdown, and biggest losing streak you can take. Optimize your trading to keep your losses under control. Of course, that list can be extended. We can add, for example, trading psychology into that. As I said, a trading plan is a very personal thing and while you mature in trading it will become more and more sophisticated. The elements that we discussed in this article are crucial for your success in trading. In my view, their absence will lead you to a failure. What do you want to learn in the next article? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
BITSTAMP:BTCUSDEducation
by VasilyTrader
9
📌What is a 'TRADING PLAN' ; and Why ❕❓There is an old expression in business that, if you fail to plan, you plan to fail. CONCEPT OF TRADING PLAN What is a Trading Plan? In business school, you are taught that to start a business you need a business plan. Trading is a business. Therefore, every time you trade you must be trading according to a well-thought-out and calculated plan. A trading plan is a comprehensive framework that guides your decision-making in any trading activity you undertake. A trading plan is to and what a business plan is to a business. As the adage goes, ‘if you fail to plan, you plan to fail’. This is especially true in where risk is ever-present in the markets. A trading plan is not merely a trading strategy. A trading strategy will guide how you will enter and exit trades in the markets in a manner that enhances profitability and reduces risk exposure. A trading strategy can be based on technical analysis or fundamental analysis. A trading strategy is just one component of your overall trading plan, which goes beyond that to also capture your overall trading goals and motivation, your trading journal , as well as your trading psychology. GOALS of a TRADING PLAN Setting goals can help, but often novice traders set the wrong type of goals. As a novice trader your initial goals should help you eventually make money and more important than that is when you achieve goals , but making money should not be your main goal. Instead, opt to make your initial goals about the process and emulating traits of professional traders. Initially, traders want to make goals about numbers: "I will make 1% per day on my $30,000 capital," or "I will make 30% per year." While it seems simple, to actually get to a certain percentage or to reach dollar targets, you will need to refine your market approach and hone your discipline. By plunging into the market and expecting to make a certain amount of money, the goal becomes almost impossible to reach over the long term. These types of goals require the trader to truly understand the capabilities (and limitations) of the trading plan they are employing, not just think they understand. Based on the method being used, it may be impossible to reach a dollar or percentage goal, but it still could be valid and provide a good return. Therefore, the trader must either abandon the strategy or deviate from it in an attempt to find more yields. For many traders, this becomes an endless cycle of abandoning strategy after strategy. STRUCTURE OF TRADING PLAN ‬‏ There are seven easy steps to follow when creating a successful trading plan: 1-Outline your motivation and desire. 2-consider money management rules and determine how to minimize your risks and maximize profit . 3-Define your (short-term ,mid-term & long-term) goals. 4-Define your trading style ( scalper- day trader - swing trader - position trader- options) 5-Decide how much capital you have for trading. 6-choose your market(stocks-forex- crypto-..) and products and Assess your market knowledge. 7- improve your trading psychology and start a trading diary. Strategies of Trading Plan How do you develop a trading strategy plan? Follow these steps to forming your first trading strategy: Step 1: choose Your analysis approach whether is price action , harmonic patterns , Elliot waves or with indicators .... Step 2: analyze your market situation and predict all possible scenarios Step 3: Choose A Trading Time Frame. ... Step 4: Choose A Tool To Determine The Trend (Or Lack Of) ... Step 5: Define Your Entry Trigger. ... Step 6: Plan Your Exit Trigger. STEP 7: Take a proper position size STEP 8: DEFINE YOUR RISK and Choose a risk-reward ratio STEP 9: BACKTEST and DEVELOP YOUR TRADING STRATEGY the most trading strategies will fall under 4 main categories: breakouts, trend-following, counter-trend and market reversals. So if you look at your strategy, you want to be able to see which category it falls under so that you can better understand, what are the strengths and weakness of each strategy. FINAL THOUGHT: SO Why is Having a Trading Plan Important? The ultimate aim for any investor or trader is to achieve consistent profitability in the markets. A trading plan is a guide that ensures you will stay on track on your journey to your desired destination. It does so by: -Making Trading Simpler It is easier to do something when you know what must and should be done. A trading plan lays out all the criteria that must be met before any trading decision is made. It will always point you in the right direction no matter the distractions present. -Enhancing Objective Decision Making Trading is about decisions. Good decisions will make you money, while bad decisions will cost you money. Having a trading plan ensures that you will make objective decisions at all times; and not subjective decisions that are driven by emotions which can eventually cost you a lot and put your trades and capital at risk. -Building Trading Discipline Trading is a marathon, not a sprint. It is important to build a solid trading plan and following it with religious discipline throughout your entire trading activity. This is the only path to long-term, consistent profitability in the markets. While traders will generally follow the daily financial news, , such as the , , or , and to pinpoint potential trading opportunities, sticking to your trading plan is of utmost importance. -Highlighting Areas that Require Improvement One of the side effect and core components of a trading plan is improving the trading journal, which is essentially a diary or record of your trading activity. Journalling your trading activity will help you to assess the performance of your trading strategies as well as other factors of your trading plan, such as risk management and trading psychology. This will, over time, highlight the areas where improvements can be made to help you become a better trader. sources: investopedia.com tradingsetupsreview.com avatrade.com This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate
COINBASE:BTCUSDEducation
by PRO_SMART_Trader
Trade like a casino! 🎰🎲💵Yep you heard me right you need trade like a casino 🎰 Key bit here is trade like the casino operates their business model. Don't trade like the clients that frequent the casinos. Why should you trade like a casino? Profitable traders understand how casinos are successful. Casinos are profitable and make money because they have an edge which they let play out. They know probability is in their favour. How many times have we all been at a roulette table thinking we have a 50% chance of winning betting on red or black. We all seem to forget about that green zero on the table and here in lies the casinos edge. With having an edge they let play out it's impossible for them not to make money. The casino is comfortable with every outcome on the bets placed knowing the edge will play out. Losses are seen as a cost of business, risk is controlled and emotions to are in check. This is why the house always wins! 🎰🤑 If you as a trader apply the same logic's to your trading strategies the end results will be the same as the casino. If you choose to trade like one of the clients in the casino with no fixed rules you essentially are gambling with you trading. Subjectivity and emotions will come in to play. Random winning and losing runs will occur which will impact trading psychology. This way of trading will only end in one way and that's by giving everything to the house or in this case your broker! Development of a strategies with proven mathematical edges ensures you will become the house 🏦💰 Once an edge is established trust your strategy and let that edge play out. ----------------------------------------- Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. Thank you. Darren
Education
by pow_removetheguesswork
Understanding draw down recovery 😬😥Morning traders. Middle of the trading week all ready! I thought I'd take this opportunity to discuss a topic we all fear and we all find ourselves in at some point in our trading journey. That topic being draw down and your account in a loss of starting capital. The table I have drawn on the chart shows the amount of gain required to get an account back to break even depending on how big the draw down is on your capital. Scary stuff when viewed in a simple table format like and hits home just how big of task over turning losses could be. No trading system or strategy has zero losses or draw down and all strategies endure losing runs. To avoid excessive losses there is two crucial elements. Sounds obvious but cut losing trades quickly is the first element, second element is factoring probability into the trading strategy. Probability helps control risk management which in turns keep losses to a minimum, probability is obtained by carrying out back testing on your strategy. You can't plan for probability in your risk management if you have no data for your strategy. The example I am using for this Idea is on AUDCHF H1 timeframe and thanks to our built in strategy tester I can see if I traded this pair in the manner the strategy is set over the last 292 trades at 1% risk I am 22% down on my account. It would not take in the region of a 25% account gain to be back to near break even on my account!!! You don't need a built in strategy tester to gain this information you can also manually back test a strategy in order to avoid losses and to know if you are entering markets with a proven edge. A trading edge means your strategy creates bigger wins than losses. Which in turn means you avoid the situation shown in the table. To avoid hefty draw down don't enter the markets blind with an unproven strategy. Ensure you have back tested strategies with probability factored in to those strategies that way what is shown in the table wont apply to you then 👍 ------------------------------------------ Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. The stats for this pair are shown below too. Thank you. Darren
Education
by pow_removetheguesswork