Build your own trading plan

How to build a Trading Plan

You probably know that you should have a trading plan in place before entering a
trade. But what does that really mean? Here are a few ideas for creating your own
trade plan, along with some of the order types you can use to implement it. A trading
plan is designed to predetermine your exit strategy for any trade that you...

1. 2

Define your Goals

Setting precise trading goals can help enhance your profit potential when trading in
the financial markets. Setting trading goals as part of your strategy is paramount. You
need to learn to achieve these when placing your trades. What sort of trading goals
should I set? It’s essential to set goals in our personal and business...

2. 3

Follow a Daily Routine

We have recently watched a documentary about Bill Gates on Netflix, and the thing
that stuck with us the most from it was that he didn't become one of the wealthiest
people in the world through luck or inheriting vast sums of money. He reads a bunch
of books while travelling. He can read 150 pages an hour, and most...

3. 4

Reward risk and probability

In this lesson, you will learn: Why reward/risk probability is essential in trading. Why
probability is the key to every trading strategy. What are the most popular reward/risk
ratios?   To calculate the reward/risk ratio, you need to divide the amount you stand to
lose if the price moves in an unexpected direction (the risk) with the...

4. 5

Practice is key to success. The power of backtesting the rules

There are no shortcuts to success and becoming a profitable trader. It's a daunting
task, and you will suffer a lot. There is no magic potion you can drink that will allow
you to understand the supply and demand concept. We don't live in Harry Potter's
world, which is real life. The practice is the mother of all sciences. To be a...
Supply and Demand Basics
1. 1

Locating new imbalances

This conclusion is based on simply reading the charts. Most traders fail to grasp
essential points, they want to know precisely every zone, and they want to know the
actual trend on each timeframe. In actuality, it's all about where the buyers and sellers
are. It really doesn't matter how I enter into a trade or which strategies I...

2. 2

Supply and Demand basics

Understanding what is happening behind the scenes is the key to developing any
trading method. Don't look at candlesticks on your trading platform as just red and
green pictures and patterns as they express supply and demand. Understanding these
concepts will make a big difference in your trading career. It will allow you...

3. 3

Examples of strong imbalances

Be patient, my friend, BE PATIENT. I am pretty sure you will ignore the statement I
just wrote above. Why? I know for a fact. As a human being, your ego and emotions
control your actions, and you are probably not an exception. You will tell yourself
you are, but that's probably not you but your ego or the voice on your left ear...

4. 4

Impulses versus corrections

Before we delve into the world of supply and demand imbalances, we need to explain
in detail a few factors that are key to understanding what we want to see when we
want to locate new supply and demand imbalances. We are talking about impulsive
and corrective moves. Impulses and corrections. Impulsive and...

5. 5

Unclutter your charts

It would be best to not run mad drawing all the imbalances and impulses you see on
every timeframe because it will be counterproductive.  Trading does not have to be
the stressful pull-your-hair-out endeavour often portrayed on TV and media. To
reduce stress and to make your trading clutter-free and efficient, ask...

6. 6
 Understanding momentum

Although momentum and trend may initially appear similar, fundamental differences
exist between these two concepts. Both momentum and trend aim at identifying
chances to buy on the upswing and sell on the downswing. The previous statement is
Newton’s first law of motion. This is usually taken as the definition of...

7. 7

Defining an Uptrend

You have probably been trading other strategies, and because of that, you have likely
been exposed to several ways of defining an uptrend. Most mistakes will happen
because you will try to use your current understanding of the markets when learning
new concepts and ideas.  This is where most of us will start...

8. 8

Multiple Timeframe Analysis Basics

The article below goes over the basics of multiple timeframe analysis. The examples
go over Indian stocks. However, the same principles apply to any market and asset.
It's an article I was asked to write for a critical learning institute in India back in 2017.
Capitalism rules the markets in much the same way as the law of...

9. 9

The strength of the impulse

The strength of the impulsive move is one of the most essential characteristics of an
imbalance, but not the only one. It's one of the most critical features for an imbalance,
though. However, as you will have probably seen if you've been trading imbalances
for some time, there are times when a super-strong imbalance is just...

10. 10

Use supply and demand as a framework to trade other strategies

Many traders think that there is a flaw in using more than one trading strategy. These
traders are unlikely to realize many flaws in using multiple methodologies to trade the
market. These flaws can be fixed if the traders begin using a single strategy. To
succeed in trading a single strategy is extremely difficult. Imagine how...