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To avoid being trapped into a gamble in the stock market, it’s required to have a clear plan/objective defined and share purchase/sale must be effected based on appropriate risk/reward assessment using available data/indicators.
Trade plan is nothing but a plan to enter ND exit the trade on the basis of RISK/REWARDS
Trade plan is a plan in which the entry and exit price of a stock and stop loss point is arrived at. This is based on technical analysis
Trade plan is needed because you need to know at what price you can plan to buy the stock and sell them and derive the expected risk and return. Otherwise, we will be blindly trading and not be making money. With the proper plan, we can expect our success ratio to be more than 50%.
A Systematic method for screening & evaluating stocks, determining the amount of risk or should taken & formulating short/long term investment objectives. A successive trade plan will also involve details like the type of trading system to be used
Essentials of Trading
– Self Discipline
– Beware of Opinion
– Demand & Supply
– Ego & Humility
– Self Research
– Adaptive to market change
– Risk & Money management
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