Elements of a trading plan. If you trade without a plan, based on in-depth analysis and testing, you will seriously weaken its position. Treiding, as well as politics or war, including the tactics and strategy – a combination of general plan with specific techniques to accomplish this plan. Woe to the army, which has no policies or practices of warfare. Powerful forces have repeatedly defeated by the weaker opponents because of lack of tactical skills. And just a great trading idea is useless without a viable plan for its implementation.
Stock trading is associated with greater emotional weight – because of adrenaline, which is often accompanied by only one idea that can make or lose big money. Many newcomers rushing into deals without a clear idea about how to obtain the potential profits to which they think are within reach. To avoid this trap, you should always approach the markets with a detailed plan – regardless of your trading style, time period, the market or method. Slogan, which is worth remembering – plan your trade and Trade in your plan. The plan should actually suggest specific steps that you can perform. Common words or vague rules lead to the "intuitive" trade, which inevitably ends with unnecessary losses.
Losing trades are inevitable, but to do so they appear as seldom as possible. Prior to the auction before placing the transaction you must be sure that your approach has positive probability of profit. To form a quite simply, that's just not easy to do.