Why you are not following your trading plan?

Ask this question to yourself? Why I’m not able to follow my trade plan.

Keep the answer with you.

Let me tell you why you are not following your trading plan.

There are few reasons for that, first one is important,

1. Because you don’t have a trading plan. 😊 (It applies for most of the retail traders)

Pls don’t tell me that you know where to enter and where to exit. Entering and exiting the trade is last step of your trading process. Anyone can do that.

Let’s understand what is trading plan.

As said earlier, it is not just entry and exit. Below are the few important thing which you need to consider to develop your trading plan.

Trading Plan

1. Your Goal in trading (What you want to achieve in the trading business)

2. Risk you are going to take per trade or per day (I will take maximum 1% of my trading account)

3. Total number of trades you will take in a day or week or month (I take maximum 5 trades in a day)

4. Risk to reward ratio (Always trade with minimum 1:2 RR)

5. Timeframes (I use 30 Mins to define the market structure, 3 mins to analyse the trend and momentum & 1 min to take a trade

6. Exit strategy (I never wait for initial SL to hit; I try to move my SL close to cost when trade moves in my favor)

7. Analyzing the market.

Let’s see how to analyze the market, this is the most important one in the trading plan. You should know how to analyze the market in proper way. Consider you are a day trader, what is the use of analyzing what happened 1 day/ 1 week / 1 month ago. Keep in a mind, you can only make a money by identifying present and future movement of the price in the market.

I will tell you my way of analyzing the price, I use 30 mins to define the market framework, 3 mins to analyze the trend and momentum and 1 min to take the trade.

I do it on my own, without any indicator or any other data. Believe me you can also do that easily.

  • Once I analyze the market and I will wait for my setups to form, once setup formed, I qualify it. If the risk to reward is satisfied, I will look for an entry else I ignore the entry. This is trading plan.

  • Once I entered, and price moved in my direction, I bring my SL to cost. If price again reversed and hit my cost SL, I don’t have any issue. This is trading plan.

  • Once I took 5 trades in a day before 1 pm, I will close my terminal and call it as a day. This is trading plan.

  • Once my losses are more than 1% of my trading account, I close the terminal. This is trading plan.

And above are some of my trading plans. Now tell me what is yours? If you don’t have one, this is high time you need to get it as soon as possible. Because,

“A clear vision, backed by defined plans, gives you a tremendous feeling of confidence and power.” – Brian Tracy

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