What should you put in a trading plan ? :


For starters, be aware that a trading plan helps to avoid making a few mistakes. Used over a long period it will also accustom you to be disciplined and take a step back from time to time.
To be effective, it must contain the following elements :



Which timeframe to use to read graphics ? This is whether you want to do swing trading, scalping, day trading, etc. In other words, what is your trading strategy.
What tools can be used to define the trend ? Defining the direction the market is taking is one of the bases of forex trading, so it is important to use technical indicators allowing you to do so like moving averages or parabolic.
Which tools to choose to confirm the trend ? Once you have defined the direction the market will take, you must find a tool that will allow you to confirm or invalidate the trend. Using these tools, you will avoid false tendencies for example.
How to define its entry point ? To optimize its gains and minimize its losses, you have to enter the market at the right time. Many tools allow you to do this.
How to define its exit point ? Once entered on the market, it is also necessary to optimize the output. Generally, the following rule is applied: the gains are allowed to run and the losses are quickly cut.
What are the risks ? This point is probably the most important, because maintaining the balance of its trading account is a priority if we want to continue trading in the financial markets.
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