Does this Quote really works in Stock Market- Plan your trade and trade your plan

Did you notice that trend followers such as Ed Seykota, Bill Dunn, and many more pull millions from the stock market? The simple reason for this is that they plan their trade and trade their plan. According to Occam, always go for the simpler one if you have two trading methods that help you get similar results.

Like many trading professionals, you may be familiar with the adage “plan your trade and trade your plan.” But, do you know how to implement it? Well, here are a few tips for implementing it in your stock trading.

Make profitable trading decisions

The objective of planning your trade is that you make good decisions. Cautiously planned trades work better than the ones taken in the heat of the moment. Hence, you need a more systematic methodology.

Do not misunderstand stalking with planning or forecasting with a decided plan

Loss in trading comes from lowly processes. Your trading success doesn’t depend on your skill to acknowledge patterns, and rather it depends on how efficiently you can eradicate mistakes and get better at decision-making.

Flawed trading begins with a confused attitude to planning and trailing prospects. Planning your trade is different from executing it. Your trade planning is also distinctive to your trading plan.

In simple words, you plan your system depending on the market model. Then you plan and handle your trades according to the system.

·         Your trading plan is when you implement trade rules to plan your trade. It offers an overarching structure.

·         Then you conduct a market evaluation to acknowledge where your edge is. Once you find it, you evaluate how to trade it rightly.

·         Then you sit patiently and wait for the time to enter the trade.

·         Once you are open to the opportunities and market changes, you eliminate flaws better.

·         Lastly, your review depends on the market insight and data collected from trading and improve and upgrade your trading plan.

Which is better investment- Mutual Fund or Direct Stock Investment?

Putting it into action

The basic to trade your plan is to treat market evaluation differently from your trading time. Plan a time when you look for specific opportunities with particular criteria and target some trades. It could be one daily or one every week. Once you have checked the set-ups, focus on how to trade those set-ups. You should consider the entry requirements, position size, profit target, stop loss placement and more.

So, now you know when you will enter, how much you want to trade, when you want to exit, and what your profit will be. Consider your decision if you want to take more than one entry or not, if you get an opportunity.

Once you have applied your market analysis and acknowledged the opportunities, you move to the stalking stage.

Stalk your trade

Once you get your pre-planned entry norm, make immediate decisions. Failure here can cause a big execution gap. You may be an amazing analyst but a poor one to implement it.

After you have entered the trade, keep an eye on the market and respond accordingly. You should execute your trade management plan now. If you notice an exit condition, then do according to your system trading plan.

Wrapping Up

Keep assessing the situations and broaden your trading plan. You don’t have to wait to begin trading your plan. Do proper homework to know the best opportunities. Mention your plan of action precisely. Write your entry conditions and act accordingly and the results will be amazing.