Now let’s get into how to create a trade plan! Well here is one of the mechanism that could be used while make a trade plan or trading journal. Here are steps that could be followed in order to create a trade plan:
Table of Contents
Assess the market
Before any decision to be taken it is important to have market assessment. Use tools that can help you in making a fair assessment of the market. For instance, if you choose to use Sentiments Decoder as an intraday trader in Nifty50 then your daily monitoring of the sentiments will help you to identify potential opportunities in the market. If it is positive sentiments then there is clarity to either trade in bullish direction or avoid any trades in bearish direction.
Make a note of entry and exit criteria
Based on assessment. This noted criteria then will be used as a reference point to actual trades taken. It will help in understanding reason behind planned vs actual, as well as let you think harder on the reason of variation.
Make a note of win or loss
Based on entry and exit taken vs planned. If there is a win it is because of the assessment or just a fluke. Similarly if it is a loss then is it due to incorrect assessment or wrong trade taken from planned or something else that made you take that decision at that time like emotions.
Make a note of timings of trades
Possibility of having new findings around timings or time period in the market. For example, trader or investor is loosing because when he saw target profit is achieved he chose to wait with the hope for profit to increase. However it happened otherwise and winning trade turned into a losing trade. Just a trivia, in a price chart of any stock there are two axis Price vs Time. Do not take timing lightly! Do you know in Indian markets its always the beginning and closing of the market hours that matters. Big players make decisions, accordingly investors / traders having skills to assess those sentiments will take their trades next day!
Conclusion – Keep Adapting and Evolving
Continuously review and adapt your trade plan based on your trading performance and market conditions. Analyze the effectiveness of your strategies, make adjustments to your risk management or entry/exit criteria as needed, and refine your trading plan based on your evolving experience and knowledge.
