Topic: The importance of a trading plan (Read 562 times)

Of course I think it is clear that planning will always be something that someone must have when they want to do anything, and this applies to everything you do especially in the process of achieving success.
In trading, planning can be said to be the key to success, because something complicated that is done without any planning will eventually fall apart.

Planning means covering everything, risk management, methods or ways to make a profit are included in the planning category.
Trading is a skill activity and you will only be able to have skills when you want to learn and by adding planning it will be easier for you to achieve development related to skills gradually.

Yes, one must plan before trading. In fact, the most important thing to succeed in whatever we do is proper planning. Until today nothing has been successful without proper planning. Now a proper plan is definitely a very important thing in trading.  For example, in trading, you must have a fundraising plan and then you must have a fixed source of income. Because if you don't have a fixed source of income then if you get hurt by trading then it will have an adverse effect on your mind and you may not have the courage to trade And secondly you need to know about trading, how it works and how to analyze the market.

Because making up trades without any plans or basis would really be just that considered out to be that a gambling or any other things which you can apply analysis and strategies then doing something without having those kind of preparation is really that can be considered gambling and this is really that a shit thing to be done on the time that you do something such as this. Speaking about trading then this is really just that basically or normally be needing up this kind of consideration on the time that you would really be that doing trading. It should be coming up with a plan whether applying those common technical approach or making use of fundamentals or would really be doing both, as long you would be bale to project yourself into something that basing up with those analysis then it would really be just that fine. There are really just that those individuals who are really that just too desperate on making things do happen on whats up into their mind without even trying out to realize that they are really that doing something wrong.

If you do have those kind of intents like having that kind of positivity that you could make money with trading so easily then let that market slap up your face in regarding the reality on how this market works and behaves. You would really be able to find yourself finding to be that delusional but of course realizations would really be taking up place on the time or moment that you would really be facing up some challenges
along the way on which it is really just that pretty normal on this kind of situation. Important of a trading plan is something that you will really be able to mind on at the moment that you would
be experiencing shit conditions or situations on the time that you would really be doing trading and this is something which is really that very normal.

If you want to trade for a long time, of course every trader must have a good plan so that they do not immediately lose and make them reluctant to return to the market. Because besides money and knowledge to analyze and read the market, it is clear that other support that must be prepared is good planning so that capital in the form of money can be managed well too. As for the emotion itself, it must be stored neatly within ourselves because fighting with emotions will always be messy and will not produce results.

No trade should be made without a well made trading plan. That’s what it should be, but I doubt if these newbies who decide to trade in a rush have constructed a good trading plan first because obviously, they won’t be trading at a loss or let’s just say, they would have minimize their losses in trading if they prepare a trading plan prior to trading in the market.

While trading plan should be made mandatory for all traders, however not all traders prefer this kind of idea, since those who followed their trading plan have no guarantees that they end up in a successful trading, but most probably their losses might have been lessen or minimized.

a strategy in trading is a must. This can make you get maximum profits and reduce deep losses. Many people immediately jump into trading without thinking about any strategy, and as a result they lose a lot of their assets. Apart from strategy, research and analysis are also things that must be done. However, it is an important thing that can keep you focused in the lucrative trading market. Many people have made profits in trading, but without a strategy, this can turn them into losses.

Having a plan towards making a trade is a crucial aspect i which needs more attention in other for us to have a bearing on how our trade is going to look and the direction to take, this may includes on the adopted strategies, time and duration needed as well as the trading pattern needed to use, planning our trades will help us towards achieving what we wanted and also increases our chances for arriving at the target we aimed on trades.

When it comes on dealing into something then of course having a plan would really be that relevant rather than on making yourself doing any actions without any basis on which we know that this would really be that totally could really be that resulting a total mess up when it comes into this aspect. We do know that when it comes on making decisions specially when you are up to something then you should really be needing to act
accordingly and anything will really be accompanied by a plan which it isnt really just that limited to trading but also in other things in life as well. Talking solely on trading then of course it will really be that relevant on having one because you cant really just that make yourself having that kind of trading without any basis on the things that you've been doing. You cant really just that put up trades without executing some plan.

You would really be finding its relevance on the time or moment that you do find yourself having those kind of condition where it is really that hard to guess up. Although plans arent that 100%
accurate on giving out 100% positive result but at least you have applied something on which it will really be that making you having that better chance on success rather
than on doing something without having some applied analysis or plans then that would surely be a messed up thing.

When you draw up a plan and you learn how to follow that up, it is going to be hard to break into another mould, you will become the person who does that and it's good if it works but if it doesn't work then finding something else, or giving up what you have is hard. I have met with people who had not so great trading strategies, and what they got was very little return sometimes and bad days mostly and overall their result wasn't that great, but because they were in either small profit or small loss, they always thought that the big day would come and they would finally make some profit, of course that never worked out for them in the end. I believe that it is not that easy to make this work, and we are going to have hard time with it.

Yes you are correct, I think most traders loose due to emotional trading, lack of money management, proper trading plan. It takes time to understand markets and setting proper trading plan.

In last few years, we are having many changes just because of technology because now we are having more depended on this just because of these things are not going as they were going few years back with mostly peoples spend more time on strategy or planning then they go ahead with their work this was giving them good success even peoples were spending too much time on this and then having work because they were feeling strategy or planning is mother of the success but recently this all is having nothing to do with because mostly peoples depending on technology.

For trading, if we do some proper work and then have started our journey this will give us better success because this will give us better way of having profit then we can understand about market fundamentals as well because these are main points for the success.

From all that you said I see that what is more suitable to be said into the initial strategy is knowing when to enter the market and knowing when to exit the market and another one is knowing when to do nothing in the market except just monitoring it. Because every time it must happen in a different trend so traders who can read the market trend correctly will definitely not experience more losses in their own trading. While for other things such as mistakes and also risk management are additional points that must be understood correctly before trading.

It's like you build a house, everything needs to be planned, from buying building materials, drawing building plans, etc., all of those things need to be planned - just imagine when everything is not planned and calculated, then the building might take a long time to be built / messy. Likewise with trading, a trader needs to plan their trades and calculate what to avoid or what to do before, after, or when a situation occurs. When a trader has planned his trading, it means he is one step closer to succeeding in his trading.

I believe that loss is unpredictable in trading, but they are certain things that make it possible for you not to lose unnecessarily, making a good planning is the best decision to the take, there is not an expert in trading, no matter what, it is impossible to prevent lost, but they are things you need to do to prevent frequently lose.

Firstly, you have to understand and have good knowledge and skills on how trading work before you involved in trading and call yourself a trader.

Secondly, decide on the amount you will use to start trading, either higher or lower capital, also focus on the maintenance of leverage to prevent wastage or loss of money, be aware that it is not always "the higher the capital the higher the return" it is not always possible, it is advisable to invest with what you can afford to lose, book keeping is important and always record the transaction made in every daily basis, to prevent any mistake, calculate the profits you make, save it and do not lavish it, so that you should be able to know what you have achieved at the end of the month.

Trading plan and Trading strategies both of same thing to me, because risk management, good entry time or exit time, trading success ratio, mistakes and market analysis such all of those activities are included in the trading strategies. People's who are able to understand all of those then who's will become a successful traders.

Indeed. A trading plan will make your trading activity easier and more productive, since it includes informed decisions that will help you achieve the right decision making most especially when the market is very uncertain. Without a good and detailed trading plan, aside that you will find it hard to make a successful trading, you will also end up wasting your time and money while trading unknowingly.

Trading plan plays vital role in making you profit from altcoins. If you don’t have a plan with you then you will invest in wrong coins and loose all your investments gradually. But if you have a plan then you will not loose your investment and in days or months you will double that investment. Make a plan in such way:
1. How much you want to invest
2. Make list of coins you want to invest
3.Do market analysis and see trends
4. Divide your investment in portions
5. Buy coins and mark date
6. Daily check the market trend
7. Sell whenever you are in profit

Yeah I agree but most people ignore this part, and technology could help you but for some reason keeping it track on something like excel never felt that great for me as well, writing it down makes you see things that you otherwise wouldn't see with a simple copy paste. When you write something down, it is going to allow you to have greater results and the profit would be something that would be memorized on what you should be doing.

Success in trading is all about discipline and when we are caring on each and every aspects which will definitely influence on final results on greater degree.

I know that it is going to take some time and I know that it won't be too important to ignore this, but paper and pen would help with this too. I know many people are a lot more technologically advanced nowadays, and I know that it is not that simple to make that work some other way neither, we need to make sure that we know what we are doing, but that doesn't mean that we are going to end up with a great result that quickly, whereas if we deal with pen and paper, like actually write down our stuff, then the results would be a lot better, it would give us some good results, and would be happy situation.

That's why I try my very best when it comes to this, allows me to have a good result and I end up with checking my notebook all the time to see when and what went wrong, that might be the another reason for my better results.

Having a plan is certainly very important, but before making a plan for trading, of course we must first analyze the trading that we will do and we must also be able to comply with the plan that we have made in order to get results according to what we have planned before trading, because without being able to carry out the plan that we have made, it will certainly be difficult to achieve success in the trading that we do. Everyone who trades will certainly experience the risk of loss and they must accept this and re-learn the mistakes they made and when they experience failure, do not continue trading with greed that will cause even greater losses, but they must be able to learn from mistakes and re-make better plans before trading.

Yes, that's right. A trading plan is indeed a must for every trader, because without a trading plan he will not be directed. So every trader before deciding to trade is required to make a trading plan. Because with a trading plan, trading has a clear and directed goal, and with a trading plan we become disciplined when trading.

With planning, we can also determine profit targets and risk tolerance according to our wishes. That way, we are not only pursuing profit, but can also accept the risk of trading if we experience losses and of course we can control ourselves to avoid greed. In addition to planning that must be followed and adhered to, planning should not be easily changed so that you do not make the wrong decision in trading. So if asked is a trading plan important? the answer is very important, because trading planning is part of success in trading.

Having a proper plan is a must when you will make a trade because once you lose with your trading due to the volatility of the market you might make a wrong decision that causes you to lose more assets, a trading plan is your discipline in trading if you didn't follow this your planning becomes useless and you will now act depends on your emotions. No one would like to make a trade and just lose their money in an instant because of their wrong decision or else you will just giving free money and charge to experience in trade without proper plan.

This year I see that every trader must use a slightly different method and plan in carrying out their trading activities because current market conditions and trends are still influenced by hot issues from outside so that it can cause traders to use a slightly different method than usual. A close example is like when the decline occurred two days ago where traders and investors must have the ability and willingness to buy at low prices because the average coin has experienced a price drop when Bitcoin experienced this in the market.

You need strategy to be successful in trading, but in order to be successful, a trading plan should be laid out and is very necessary so you can work out on how you will use your stragey in trading. Otherwise, if you trade without a trading plan, even if you have a powerful strategy, you will find it hard to make it work because you don't have proper guidelines in trading that you should follow in order to end your trades according to your own desired outcome.

To me, trading plan and trading strategy are still the same thing you are talking about because all these things you mention here are things that we also use when we want to mention the strategy that has been used in trading as a successful trader, so I think you are talking about strategy. However, plan is very important for anything we are doing; if it lacks a plan, it will later fail. In trading, a plan is very good. Without a plan, the way trading works, a trader will break or always lose if he or she enters the market, but if there is a plan, that will be a guide for such a trader to operate in the market.

When you don't plan then trading is not for you because you need to know the amount you are willing to spend on trading and the amount of time, a lot of things have to be done for you to be able to trade well and I usually tell my friends that trading is special and only a few people can access the gift it comes with, yes financial plan should be the first plan because if you want to trade because without money you can not trade. and make sure the money you are trading is your money because I saw a lot of people already thinking of borrowing money to trade and what if you don't get your money back you will still have to pay back the money you borrowed.  and you need to have a good source of income in case you want to do some good trading everything is about your capital, the more capital the more money you have, I will even advise you to go to the extent of drafting your plans out so you don't forget the initial plan and also a way of initiation have to tally with the whole plan, have your plan and make sure you execute them.

Yes, it would really be always relevant in speaking about on having a plan because we know that dealing up something without having some good plan will really be leading you to nowhere on which you dont even know
on what you should really be that trying out to achieve. Also, one of the most important thing to consider about that risks management factor on which this thing would really be that important because this one considers on where you would really be that putting up yourself on making such decisions on that particular condition or market movement or behavior. You would really be able to see the importance yet you would really be finding yourself get prepared on dealing up with an unpredictable space. On the time or moment that you have found yourself that dealing with crypto then it would really be that relevant that you should really be that making up some plans so that you wont really be that making yourself getting lost. Trading without any plans or analysis is really just that as good that you are doing gambling because it would really be totally too risky to make out decisions without any basis. Whereas, you could really be able have at least that lesser risks on the time that you would really be applying something based on research.

When you do have plans then of course you would really be also having those back up plans on the time or moment that shit things happen then you do come prepared, which its not like into those who havent
done or consider one because on the moment that you do experience those things on which you hadnt that expecting then this would really be bringing up that kind of emotion on which it would really be causing up for you to have that loss of control specially on the moment that you would be handling your capital. On the time or moment that you do find yourself being that too impulsive then decisions would really be made out
isnt something that would really be good anymore because you had already that becoming that so desperate.

Yeah true, if we are dealing with anything in life, a plan is important and having a plan makes things easier to handle, it makes it a lot more profitable as well in trading. We need to make sure that we know what we are doing, and because of that we are going to make some good adjustments, it needs to be something that will take a while but it can happen.

We are going to cause a lot of trouble with what we have, and in order for us to grow further we are going to end up with some issues, it is going to be very hard.

What we need right now is to make sure that we deal with something that's going to take some time, and because of that we are going to see some changes. Of course it is not that easy to handle it all, but we can make that work somehow.

Planning ahead is what makes us from making mistakes, or more like if we make a plan and stick to that plan is what makes us from keep making mistakes. This is why we need to do a lot better planning and stick to it. If we end up with nothing and no plan, then we are just running around like a headless chicken and in that case the result will of course be a loss, nobody with zero planning could make a profit in this market, not even veteran traders.

Not only in trading because wherever we run a plan is something that is needed.
Especially if involvement in trading and without a good plan we will not achieve the goals of the trading that is done because we do not know what to do. Trading does involve a lot of analysis because it requires the ability to see the movement of coins in the market and this method is a little more difficult to learn without discipline.

With a plan we can create a strategy because we know what to do in trading.
People say strategy is more important than a plan, but for me with a plan it will be much easier to create a strategy. Both are interconnected and need prior knowledge to achieve perfection in trading.

Its not only "can" but it is really indeed unpredictable all the time and this is why having up some plans or having those kind of preparation is really that something recommended. You cant really just that make yourself
doing up some trades without any plans because this would really be causing up that loses on which you would really be might ending up on having those kind of regrets on just because simply you did really make it as if
you are doing gambling because on the time or moment that you dont have any plans on dealing up with trading then you are just basically doing gambling and its not something suggested with that kind of approach.
Plans and preparations arent really just that limited on trading alone but also in other real life situations as well on where proper planning and preparation would really be the key.Lets say that  you are planning to have some trading or having that involvement, then how you would gonna do it? Of course you will really be trying out to plot some charting and other fundamental applications on which it would really be that leading
up to have that much better analysis which increases the odds on making profitable trades in compared to those who have none. If you are really that tending to trade but without preparations then you are really just that doing gambling but sooner or later you will be able to see its relevance when it comes to this aspect. It would really be that so important that you should really know at least on what you are really that dealing on with.

Although overall the plan is not always a success but yes I can confirm that the plan is an important part in achieving success, everything will not run smoothly when there is no plan that you implement, especially this is trading which is an activity that involves money and risk. Everyone does not like losing money, but with planning especially related to risk management such as emotional management then it will be able to minimize the amount of risk that you will face.

On the other hand as you said OP that by having a plan then you will know about when is the best time to enter and when is the right time to exit, and that is a skill that must be possessed by every trader, because as we see not infrequently some of the traders who fall and get carried away in blind trading which ultimately makes them experience big losses, and this is why planning is important, because with that all actions will be measured based on good considerations.

Trading can be unpredictable at times, and you are correct. Even talented people lose money in trading, but they will not lose as newcomers since they lack the experience that motors have. It's a good idea to develop a trading strategy, and if it doesn't work, you can learn from others who are more experienced. since we are learning every day. I am not perfect at trading; I lose more than I win since I am still learning, but I believe in myself and will endeavor to be perfect one day. I focus on investment because I reduce my risk on it since investment whatsoever you invest on it one day you will be profitable if the price increases. but in trading if you have lose you lose you most get another funds to stakes again. But when you have get enough knowledge on trading you will enjoy it very well.

although beginners in trading can also use strategies and make trading plans. but the results may not be optimal. making a trading plan also requires experience. but everyone who wants to learn I think can try and learn it. the problem of results all depends on how much effort. his name is also a beginner, even those who are experienced can also fail in trading. it is not a problem of using the wrong strategy or making a mistake in making a plan. some situations may not be in accordance with the trader's analysis and predictions.

Everybody especially new traders may not yet possess the skill to properly set out a trading plan. It will even be harder to create a trading plan for yourself when you are self-taught because you may find it difficult to determine if your plans are correct. If you learn trading from an older trader who is more expert than you are, based on their experience, you as a new trader should be able to adopt their trading plan and strategy and then as you become more experienced make modifications to it. This is one good thing of learning trading from someone because you learn far more than theory.

These are the reasons why each trader should always prepare a trading plan prior to trading, so that there will be bigger chances to succeed than losing the trade. But even so, having a trading plan won't guarantee completely for a successful trading outcome. Experience will always be the best strategy towards trading. If you think you still don't have the sufficient knowledge and skills required in trading, yet you're able to make a good trading plan, still that won't make a profitable trader in the end.

A trading plan is always something that I've wanted to organize because it would go a long way for me to manage my trades because if there's one thing I have notice is the constant emotional struggle and the constant need to close trades when the trade goes in the opposite direction, even the tiniest bit and leaving trades longer to accumulate more profits even though there's already enough profits. It's just random, literally.

OP, you have talked about your trading plan. I'd like to see a sample of your trading plan. Nothing too fancy and you can remove any sensitive detail if needed. This isn't because I want to copy but to get some insights on what constitutes a trading plan.

Somehow you have a point. Instead of seeing OP showing us his own way of making his trading plan so that others can learn and assess, he is only citing the importance of a trading plan which I believe majority of us are already aware about it. Although everything you said is true, but atleast you should have made your post more constructive than seeing it as mere defining, that anyone who'll go for research will certainly get the same idea.

Every trader needs a trading plan that can help guide them on how they're going to trade. Without a trading plan, we are going to lose. Trading strategy and trading plans are the same thing with a different way of saying it as the strategy that you're using when trading is the same that as saying you're planing on trading in a particular way. There's no trader that has been successful without having a strategy that he uses to have good trades. But  have to be open to changing our trading strategy when it isn't working as it use to do and also learn to become very perfect in one strategy that we're going to use more often to win .

Of course having a plan in trading is very necessary because this plan is an activity that will be used when trading so that your trading is more systematic so that it can reduce the level of loss when you trade. So implementing a trading plan is very important, besides avoiding making the wrong decisions, trading planning will also make your trading simpler than if you don't have a trading plan at all.

This can be likened to when we use Google Maps or directions, with Google Maps you will be directed. if you want to travel to an area that you have not known before. You just enter your current location and enter your destination location, then Google Maps will provide the best route and directions to get to your destination without getting lost.

So trading planning is exactly the same as using Google Maps. Because with planning it will make your trading easy to achieve your goals so that you can get profit and of course it will make you more consistent.

In one of the links to sources related to technical analysis that outlines how to understand a trading plan, its definition and how it works in my local language, it took me quite 15 minutes to read and I read it slowly while trying to understand each point by point, although it is good and rational, of course I still think that if I don't master the science of how to master the market, the trading plan will not work as planned.
https://pluang.com/akademi/pelajari/analisis-teknikal-101/memahami-cara-kerja-definisi-trading-plan

In theory, it is explained and I agree that a trading plan that is made in a structured and measurable manner will bring us good results and is useful for managing existing risks.

There is something called universe assets and other things that may be in line, but in essence market control is very necessary because it is in balance with trading plans and strategies.

@OP, I am of the same opinion with the first comment, I also believe that trading strategy and requirment is same thing as trading plan. If a trader wants to be successful in trading, they have to develop a strategy that will help them to maximize profits and minimize lose.

Hmm, OP I do agree with most of your words, and you've used a general term trading plan to cover maximum things which is a great approach as well, TBH in my view your analysis strategy and plan whatever you call it under your domain differentiate between you as a trader and you as a gambler. Now I'm sure for traders I dont need to mention how trade becomes a fully controlled position to gambling.

For the rest, a trader needs to know the difference between a good plan and a bad one, and what to learn from your actions, because trading is an endless learning journey where your experiences usually help you.

maybe you can make a trading plan and publish it here so we can understand how strategy is bigger than a plan.

Logically, when we trade we will make one or two targets, maybe even more. we plan those targets. and to be able to achieve the planned targets we need help. help to support the success of these plans is related to the trading strategy we use. yes of course it will involve some analysis that is commonly used by traders.

I think OP has included strategy and others in his trading plan. maybe it would be better to add how OP determines entry and exit criteria or risk tolerance.

If we discuss a plan, then we plan is something very important and even in my opinion it does not only apply in trade but will apply to all aspects of life that we will do. The plan can make what we do goes according to the corridor and it is a limit so that we do not do things stupid or mistakes that make us lose in the end.

But we can not make the plan just like that and then easily to run, for me who is more difficult is when we have to be able to commit in holding the plan that we have determined at the beginning. Because sometimes in its journey we have to face a complicated situation while we have to make a fast decision. So we will think whether we must keep holding what we plan at the beginning or we prefer decisions based on situations at that time. Now we must also anticipate this and in my opinion we must also be good at adjusting to make decisions, of course which ones are lower risks and which are higher opportunities.

When their is no plan before starting trading that is what makes trading result not to be successful. The first plan in trading should be financial plans, atleast when one is thinking to trade their must be a plan of of how the trade should be funded, their must be a source of income and not to be expecting to make profit in trading to fund the trading exercise. It is important to also have a plan of learning because trading is not what people can succeed without having a better knowledge about trading. Plans of exhibiting the habit that is required in trading.

Good plans will always make trading easy and successful for traders but beginner's fail to make plans before making plans to start trading. Traders who face challenges in trading is because they hardly make plans.

I just have to make research about the difference between trading plan and trading strategy and I saw that you are wrong. Trading strategies are part of trading plan but trading plan is more than just trading strategy.

To know more about the difference between trading plan and trading strategy, you can read this: https://www.avatrade.com/education/correct-trading-rules/trading-plan#:~:text=A%20trading%20plan%20is%20not,technical%20analysis%20or%20fundamental%20analysis.

Although trading plan and trading strategy can still be a matter of debate but not in the way you posted about it.

Strategy is bigger than plan and in practice of a strategy, you will use different plans to achieve purposes of your trading strategy. They, trading strategy and trading plan, both help traders to aim at gaining success, profit. This is the common purpose of trading strategy and trading plan but it's not correct if you say a strategy is a plan, they are totally different.

It is more about a trading strategy that is broader than a trading plan. A trading plan can help you to get profit in one year, one market cycle but a trading strategy can help you maintain your capital better and gain success in a longer term like 2 market cycles, 10 years or longer.

If you are aiming at long term like this, forget about trading, and switch your focus on investing.

I will say trading plan and trading strategies are the same thing. They are what you do to make successful trades and also to become a successful trader.

I am highly disappointed to see this kind of post that talked about trading plan but no useful information at all about the trading plan. At least we should expect you to list and talked about the trading plan that you have that makes you to become a successful trader.

A trading plan is crucial because it provides a structured approach to trading, helping you make informed decisions and avoid emotional reactions. My trading plan outlines my goals, risk tolerance, entry and exit criteria, and strategies. This helps me remain disciplined and focused.

By defining entry and exit criteria, a trading plan has helped me manage risk effectively and maintain consistency in my trading.

Additionally, it has allowed me to evaluate my performance, learn from mistakes, and adapt strategies as market conditions change.

Ultimately, a trading plan is essential for achieving long-term success in the financial markets.