📝 Creating and using a trading plan provides a blueprint for your trading activities and outlines the necessary actions you should take when trading.. Your trading plan should record your goals, methodology, analysis process, and risk/reward levels.. A well-crafted trading plan will also provide you with the controls necessary to keep your trading on track.. 😀
🖨 The main elements of a trading plan include:
1. A daily process to review the previous trading session or trading time frame.
2. A process to identify trading opportunities:
a. A macro analysis of the current market – news, economic reports, and other influencing factors.
b. A micro analysis of the current market – reviewing charts and indicators.
3. A desired entry point.
4. Specific risks for each trade.
5. Specific levels for stop loss and take profit orders.
💡 Every individual trading plan is unique, but at the very least it should contain the five elements mentioned above.. Record your trading process by preparing a written plan on paper and following it as is so that you can simplify your trading efforts.
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