10 Steps to Building a Winning Trading Plan
10 Steps to Building a Winning Trading Plan
Having a plan is essential for achieving trading success.
A trading plan should be written in “stone”, but is subject to reevaluation and can be adjusted along with changing market conditions.
A solid trading plan considers the trader’s personal style and goals.
Knowing when to exit a trade is just as important as knowing when to enter the position.
Stop-loss prices and profit targets should be added to the trading plan to identify specific exit points for each trade.
Building the Perfect Master Plan
No two trading plans are the same because no two traders are exactly alike. Each approach will reflect important factors like trading style as well as risk tolerance. What are the other essential components of a solid trading plan? Here are 10 that every plan should include:
1. Goal Definition
2. Trading Style Selection
3. Strategy Development
4. Realistic Expectation Setting
5. Comprehensive Market Analysis
6. Risk Management Rule Development
7. Trade Management Plan
8. Trading Discipline Maintenance
9. Monitoring and Trade Evaluation
10. Continuous Education
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