What is Trade Plan? Why it is essential

[Vijayavani]

Trade plan is a process by which we conclude what shares to buy or sell and what options to consider after calculating the risk and reward ratio. This is essential to take rational decision.

[Dr Faiz]

As always we trade with knowledge and discipline. This means we should do a proper technical analysis and decide which share to invest , when to get in to the market , and decide when to get out. Also a proper stoploss is decided in case the decided stock does not perform as expected . This gives a direction to the whole transaction from beginning to end . This is a trade plan . This can have various inputs factored in based on the financial risk appetite , mental and emotional stability and so on . It can vary from one to another.

[S Suresh]

It is plan by which we buy and sell stocks with a knowledge of its risk reward ratio through technical analysis. A good trade plan can give rich rewards and least loss.

[Dr. Karthik Jayachandran]

<span style=”color: #222222; font-family: arial, sans-serif;”>A </span><b style=”color: #222222; font-family: arial, sans-serif;”>trading plan</b><span style=”color: #222222; font-family: arial, sans-serif;”> is a structure, or a set of guidelines, to define your </span><b style=”color: #222222; font-family: arial, sans-serif;”>trading</b><span style=”color: #222222; font-family: arial, sans-serif;”> activity.</span>

<span style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;”>The following are few points to be included while creating the trading plan, the experienced traders can include more points but following 5 points are basic and very essential points to get success in trading shares, futures and options, Forex trading, commodity trading etc</span><br style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;” /><br style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;” /><span style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;”>1. Your trading objective (reason for trading)</span><br style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;” /><span style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;”>2. What and when to trader?</span><br style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;” /><span style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;”>3. Taking care of your money</span><br style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;” /><span style=”color: #000000; font-family: Verdana; font-size: 13px; text-align: justify;”>4. Maintain your trading history</span>

http://www.daytradingshares.com/creating_trading_plan_become_successful_trader.html

http://www.investopedia.com/university/how-start-trading/how-start-trading-trading-plan-development.asp

[SHREYANS BOTHRA]

Trade plan is the process by which we conclude which particular share to deal in, whether to buy or sell the share and calculation the risk reward ratio.

[Author]

Posts