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To execute any task successfully we need to have a plan, same goes good with stock market as well. To be a successful trader we need to have a good trading plan, before we enter the trade we need to calculate the risk reward ratio and trade only if we find the risk is lesser than the reward expected. All this decision can be taken if and only we have a proper trading plan. Also the trading plan makes to choose the right instrument that is to be used to trade at the given circumstances.
Trade Plan is to define which stocks needs to brought/sold, which instrument to be used, what is the margin( to understand the risk) and when to exit.
It is essential to understand and minimize the risk and monitor the market movement to the plan to determine the exit.
Trade plan is to decide which stock to buy, when to purchase what should be the stop loss etc
Trade Plan refers to the fundamental and technical analysis of the shares we are going to buy and the investment we are going to invest in the shares .
It is the perfect way which is used by a expert stock trader which is almost correct and the expected reward will be almost accurate in case of using the Trade Plan.
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