Why is it important to have a trading plan?

Some traders make a move in the financial market without having any predetermined day trading plan in mind. They do what they think is the most important thing and decide from time to time how they act . If you also trade the market this way,  without a specific plan, then you might want to be aware that a good stock trading plan is very important because it is your spirit to continue to focus on your goals . Remember that you have to stay consistent in the routine of trading, because this allows one to measure its quality as a trader.

Example of a Trading Plan

If you have a good trading plan it is highly likely that you trade with profit. Suffice it to follow the plan and always stick to it, no matter how the plan might look like. The presence of a trading plan can make your trading activity a real business. All types of business have a plan , otherwise it would be impossible to make money at all.Why is it important to have a trading plan

Now that we have made ​​it clear that it is necessary to have a trading plan the next step is questioning what to include in such a trading plan . In this we and the next article, some points should be in every plan to , as they are in a way the basis of the same .
First, there should be a trading system. This should be the center of your trading plan. A trading system should have been well tested so you can be sure that it works. The trading system should include the following information: the time frame of the market to be exploited, the criteria for market entry and exit points, the risk you are willing to take in trading, which currency pair or asset, what the object of the negotiations is (because each currency pair has different characteristics) and the amount of money you are willing to invest in the trade.

We believe that there are still some important points to which the trading plan should take into account, besides the trading system already mentioned we have learned. The second point is the trading routine which is the fundamental part of any plan. This will allow three important things to realize that you should consider: the time you want to dedicate the market analysis and the trading plan, the time in which you are operating effectively in the market and the evaluation of the decisions which you like so far, also based on the results actually achieved .

Third, you should make sure that your own emotions don’t participate in the trading activity. One must set his brain to trading, which means feelings are not allowed to mix with the trade.

Trading Plan Template

Most people do not like to talk about their weaknesses. But in this case it is absolutely necessary. One has its own weakness to find out and solve the is a fundamental step in order to reduce its error. Sometimes it happens that one finds  a solution for one of its weak points in the middle of the night.

It is important to set targets, where “money-making” serves no purpose . When one thinks of realistic and concrete goals, which is necessary to achieve this. If one has found the answer to this question then you can visualize his goals better and as long as it working until it has reached .trading plan

The last point consists of a trading diary. All transactions must be recorded in detail in this diary . The list should include the exchange transactions that have been carried out – whether they were successful or not – and all the decisions you have made ​​and the reason for it. You ‘ll find that you ‘re making progress in comparison to your previous trading after a short time . In addition, you can use this diary to learn from your own experience.