In this post, we will discuss 6 crucial things in your trade planning and the main elements of trade results assessment.
1 – Before you open a trading position, make sure that you analyzed the chart. You should identify a market trend and spot major key levels.
3 – Once the zone is reached, you should look for a confirmation. You can either look for a reversal /price action pattern, some fundamental trigger, or some indicator. The point is that you should rely on a trigger that is backtested and that proved its accuracy.
4 – Getting your confirmation, you should have a precise entry strategy. Some traders prefer aggressive entries on spot while others are waiting for a retest of some major/minor level.
5 – You must set a stop loss. Remember that your stop-loss defines the point where you become wrong in your predictions. Be extremely careful on that step and give the market some space for fluctuations.
6- Know your exact target level(s). Know the point where you start protection of your position, where you start profit-taking. Be very strict and don’t let your greed and fear intervene.
Only then a trading position is opened.
No matter what will be the end result of your trade, you should assess it:
1 – You should journal the trade outlining its end result, trading instrument, and your entry reason.
2 – Note any peculiar thing about this trade that you noticed.
3 – Record your gain/loss percentage.
4 – Identify whether any mistake was made and if so, learn from that.
Here is your minimum plan to follow. Of course, as you mature in trading your trade assessment plan will be more sophisticated.
Do not underestimate its importance and treat it as the main element of your trading routine.
Do you plan your trades like that?
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