Exclusive Reasons for Having A Trading Plan Just Before Starting Off

Just before you start your college session, there are a couple of smart bees who decide how to manage the day. Forget about the strict timetable, the college notice board comes up with. You can prepare your own daily time-table to be incorporated after college hours. You can dedicate two hours of study in Math, in case you feel you are not so good at it. The next day off after study hours can include English. Likewise, when you have a dedicated time table, after-study hours, you are able to crack exams with a better level of confidence. The same thing holds good for excellent performance in trading.

You need to have a clear cut plan or objective just before you start of trading. This makes sure you don’t go off track and you remain accountable to whatever transactions you strike on the market. This ensures you follow trading with a scholastic as well as a disciplined approach. You can stick it up on your walls or near the fridge in the form of post chits or green cards so that the plan is clearly visible in front of you. An excel sheet can also be maintained on your laptop, configuring your trade losses, risk per trade lot and wins for the particular day. This makes sure you are able to gauge your own performance and know where you are heading at. Looking at charts and indices comes next.

The trading strategy contains the following

1. Define your entry strategy. Just jot down what will be the course of action, you would ideally take, if the markets are signaling downwards or experiencing reverse spins for most of the day. When the markets are completely dampened, it is better to stay idle than to put up with huge losses.
2. Determine your risk vs reward scenario. On any given situation, you need to know when to apply a stop loss to minimize risks and as far as winning trades are concerned, you need to exit markets for the day. You need to have the goal mentioned clear cut. This is so that you are not tempted to over trade or over leverage on your account.
3. You need to determine the exit strategy well in advance. When you are at it, i.e. The live trading domain, you are completely lost and lose out your self-written objectives. Better to get it written down on a note pad or trading journal book.
4. Never adjust stop loss to meet a desired position size. You need to be earnest in following up with business ethics. Earn money using your own merit and not by manipulations.
5. After the trade is over, play a game of solitaire or chess on your PC or otherwise. This relieves you from feelings of frustration, anger, disappointment or whatever emotional feelings that can put you back on the vicious cycle.

These 5 things determine a devised strategy before you start off live in the market.

Happy trading hours!