The 7 Most Important Steps To Create A Successful Trading Plan

The 7 Most Important Steps To Create A Successful Trading Plan; Whatever the Trading strategy you are using, and whatever the platform, before entering into a trade, know what market conditions or conditions of origin you are trading in this period, and draw support and resistance levels pivotal and secondary, use the alarm signals available most of the platforms currently, Price from the area where you want to open or close a position.

Successful Trading Plan

Successful traders acquire their skills through continuous learning, practice, discipline and adherence to limited rules. In order to increase the success rates of their deals, they analyze their operations continuously to identify areas of strength to maintain them and areas of weakness to try to reform, as well as keep their emotions and feelings of fear and greed outside the game. In this article you will learn the best tips and practical steps that traders follow to create a successful trading plan that will increase the chances of your trading success and improve your skills.

1. Evaluate your trading skill Before you start any steps, you should be sure that you are ready to start trading and risk your money, so ask yourself the following questions: Have you tried your strategy on a demo account? Are you sure you have a profitable trading strategy? Can you enter and exit the market without hesitation? Can you take risks and the resulting stress? Can you trade rationally according to your trading plan without being influenced by your feelings?

2 – mental readiness How is your mental state? Have you grown well and feel that your mind is pure? If you are not psychologically and mentally prepared to go through the challenge and risk your money in different financial markets, it is best to take a break, because trading needs a mindful presence and complete mental readiness. Lack of adequate preparation will cost you a lot of money. Loss is inevitable if you are angry or upset by something or are intellectually preoccupied with a thing of daily life.

3 – Determine the level of risk What is the proportion of risk you can afford in each deal? Most traders often risk between 1% and 5% of their capital in each transaction. In case you lose this maximum amount of money you have set for yourself as a risk ceiling one day, you should stop trading immediately. The risk ratio varies from one trader to another depending on the trading method and the volatility of the asset being traded.

4 – Set your goals Before entering into any transaction you must determine the size of the expected profit from the transaction taking into account the risk / reward ratio. Knowing the risk-to-return ratio is very important, many traders do not enter into transactions unless the return rate is at least 3 times the risk ratio. For example, if the stop loss order is $ 1 per transaction, your target for the return should be $ 3. Set weekly, monthly and yearly targets for the amount of money you intend to earn or a percentage of your trading portfolio. These goals should be deliberate and realistic, and do not forget to evaluate and adjust them as necessary.

5 – Do your homework Before opening markets, you must be aware of all the political or economic events taking place in the world. Different financial markets are heavily influenced by global events. So you should know the trends in global stock exchanges, are they high or low? Futures on the S & P 500 or NASDAQ 100 are high or low? If you are trading stocks it is very important to know the trends of future contracts on the indicators, they give strong signals to the direction of the stock market. You should also know when important economic data and earnings reports will be released

6. Record your trades Most successful traders record their trades whether they are successful or losing. If they make profits that are keen to know why and how they happened, the same applies to the loss situation so that they do not repeat the mistake they made in the future. In each trading session, you must record the reason for entering the trade, the target, the entry and exit zones, the time, the support and resistance levels, and the general direction of the market that day. You can also write a comment about why you made the decision to trade. Through this log you can review how you trade, find out what you need to improve, and what to avoid.

7. Know the market conditions Whatever strategy you use, whatever the Bitcoin Code Scam platform, before entering into a deal, know what market conditions or asset conditions you are trading in this period, and draw support and resistance levels pivotal and secondary, use the alarm signals available on most platforms Currently, it tells you that the price is approaching the area where you want to open or close a deal.

How To Create A Successful Trading Plan

Active investment is an investment method that depends on making several transactions on a financial asset or a group of different financial assets by trying to buy assets at a certain level and then waiting for the price to rise to achieve a return or sell the asset at a certain level and then wait for the low price in case of selling on Exposed.

Investors, whether individual investors or portfolio managers in financial institutions that manage the funds of several investors, typically follow two basic ways to invest in financial markets.

The first method is based on the buying of indices of financial markets that reflect the performance of the market in general.

This method or method is called passive or inactive investment.

The second method depends on buying certain assets and selling them multiple times in an attempt to achieve a higher return than the general performance of the market.

The details of these two methods are defined in the following lines.
Inactive investment
A passive or inactive investment is triggered by investment strategies that aim to achieve long-term returns by investing in indicators that measure the overall performance of stock markets or other markets such as bonds and commodity markets by doing very few transactions.

What makes investors approach this approach is the low risk and diversified distribution of the portfolio, as this approach depends on investing in indicators that reflect the performance of all existing assets, as well as low costs for both investment and portfolio management.

The proponents of this approach are based on the theory of market efficiency, which assumes that most prices reflect at every moment all available information about the underlying asset and therefore it is impossible to predict the future price movement, and thus can not perform the “market timing”.

In addition, the proponents of this approach draw on many statistics indicating that the overall performance of market indicators is always better in the long run than portfolio performance based on active investment.
Active investment
Active investment is an investment method that depends on making several transactions on a financial asset or a group of different financial assets by trying to buy assets at a certain level and then waiting for the price to rise to achieve a return or sell the asset at a certain level and then wait for the low price in case of selling on Exposed.

The approach is to select a limited investment asset to achieve a higher yield than the overall market indices. Investors mainly rely on fundamental analysis by studying the financial results of companies in the case of portfolios that invest in stocks or macro-economic analysis in the case of investment in foreign exchange or bond market. Or quantitative analysis by relying on mathematical equations and statistics.

This approach is followed by investors and conservative managers who oppose the theory of market efficiency, so they seek to buy assets whose current price is below their real value, wait for a higher price to profit or sell assets whose prices are higher than their real value, .

This approach is characterized by higher investment costs, both in terms of commissions and portfolio management costs.

In addition to the need for a qualified and efficient team to conduct the search for the best asset groups for analysis and study, which means increased costs.

Nor does this approach benefit from tax facilities like The Bitcoin Code investment.