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The importance of a trading plan

The importance of a trading plan, trading plan, trading

The importance of a trading plan, trading plan, tradingIn a very famous television series of the 1980s, Col. John Hannibal Smith used always to say: "I love it when a plan comes together". When I was a kid, I loved A-Team…

In trading, having a plan is vital. Without it is difficult to work with profit. You have to be able to have everything under control, knowing always what to do at all times, even in unexpected circumstances.

A trading plan is a comprehensive set of rules covering every aspect of the life of a trader, not only the entry and closing methods of strategy, but also aspects of risk and money management, and physical/emotional/mental structure, the time to dedicate to the study or other activities. In fact, everything has to be well planned so that, you will not be found unprepared. Trading is a business that has to be scheduled.

With a trading plan, you will harness all the emotional and technical aspects of trading by transforming you into the cast-iron executors of your plan.

It is also a tool to gather the trading ideas and the plan of the week or the day of trading. You create in detail the possible scenarios for the tools that you are following. The markets move in real time, when you have to make immediate decisions (with your money) a trading plan helps you to keep calm and avoid impulsive and emotional trading decisions.

You have always to follow your plan with no exception. This is the only way of doing the trading serious, profitable business and, most of all, constant over time. The only way to not go to increase the number of those who waste their savings by doing what they believe is a "game".

Is not about mentioning always what you know how to do in every situation, that will make your trade much less stressful or improving the quality of life.

 

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