Stocks & Commodities V. 24:1 (72-75, 84): A Blueprint For Your Trading by Vadym Graifer The active management of a trading account should be treated as a business and requires a complete trading plan. Here’s how to build one. A trading plan is often described as a document with setups that a trader intends to trade and details of entry and exit. In best-case scenarios, rules of money management are added, instructing a trader on how to act during a trade. While such a plan is better than a haphazard approach, it is not nearly enough for a beginning trader who needs to build an entire trading method from scratch. THE COMPLETE PLAN The most common shortcomings of an incomplete trading plan are: • Lack of foundation in terms of understanding the market inefficiencies that a trader intends to exploit • Lack of logical connections between different aspects of trading, mismatch between method, time frame, and tools, and • Lack of a well thought-out idea on how to progress through the learning curve with minimal risk. Not many would venture into a new business without a thoroughly documented business plan. The active management of your investment or trading account is a business and requires a complete trading plan, with each of its elements aligned and interconnected. |
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