PREPARATION OF A TRADING PLAN

PREPARATION OF A TRADING PLAN

How to properly prepare for trading 

Preparation is key to success in trading. Many traders underestimate the importance of proper preparation, and therefore often encounter mistakes, impulsive and thoughtless decisions that lead to losses. To avoid this risk, it is vital we devote time to prepare even before we engage in real trades.

This means not only mental readiness, but also the creation of a trading plan and thorough market analysis. 

1. What is a trading plan

A trading plan is a basic document that determines how we will trade. Strict rules that we write down on paper or in a notebook to guide our trading activity. 

a)     What should a trading plan include? 

It should include your trading goals (what you expect from the trade), risk management settings (with what risk am I entering the trade?), types of trades and strategies (with what intention I am entering the trade?).