Benefits of Making a Trading Plan

By | May 26, 2016 5:39 pm

I always suggests trader to create a trading plan before markets opens and strictly execute the trades as per the plan. Its a well know adage Plan the trade and Trade the plan.Most of traders trade impulsively in trading,without any plan, they go as per there intuition and end result is losses. I have written many post on how to make trading plan and we cover the same exclusively in our trading course.

Today lets discuss 3 benefits of making and executing a proper trading plan.

  1. Increased Confidence

  2. Consistent Account Growth

  3. Avoiding Account Blow-Up

Increased Confidence

One of the positive side effects of having an easily accomplished trading plan is that it indirectly increases your over all confidence in your trading. As a trader it is very important to be confident for many reasons such as, eliminating hesitation, jumping out of trades too early, not taking profit, etc…By defining exactly what you are going to do on a day to day basis, you can eliminate indecision when your caught in the heat of the moment. The less decisions you have to make as a trader the less emotions can get involved when placing trades. This “un-emotional” state of mind can help you become a better more confident trader that can generate consistent profits.

Consistent Account Growth

Having a trading plan allows you to focus on the day to day activity in your account while maintaining that long term outlook of how you want to build your trading account over time. When focusing on each trade and knowing the different outcomes to expect whether negative or positive on a micro level helps you maintain the equity curve on your account. For example what sounds easier to you, making 200% return in a year or 15 points a day?

I would think you answered making 15 Points per day sounds easier. Well what if I told you that 15 points  a day (With a 5:1leverage working up to 10:1) can result in over 200% return in a year. I think by now you can realize how gaining clarity on the small details and Micro planning can simplify what you are trying to do and ultimately reinforce the small consistent account growth leading to increased profitability.

Avoiding Account Blowup

If your like most retail traders you have experienced at least 1 heart wrenching account blowup. I know in my beginning days of trying to master this enormous market, things can turn against you fast. I learned this the hard way and I know many others can associate with me on that. So how does one avoid this? Trading plan requires an exit plan when things go bad. Furthermore, when your trading strategy is not working with what the market is presenting, what do you do? You need to decide beforehand only in your trading plan.

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7 thoughts on “Benefits of Making a Trading Plan

  1. Sourav

    hello sir can you start whatsapp live buy / sell suggestion and trend analysis apart from facebook updates

    1. Bramesh Post author

      I can either conc on my trading or giving advise on whatsapp.. I have minimum interaction during trading hours Less noise more profitable will be your trading

    1. Vijay

      Man, I’m telling you, my entire capital [100% ] along with an extra 50% wiped-out in just 4 hrs. If we do not decide what to accept as a loss, the market always decides for us and it is very gruesome.

      1. Vamsi

        Buddy, I can understand your pain. My question is to Brameshji as he is a seasoned player. There are mixed responses from people around the world. Some say, Stop loss is not required for intra-day calls. They say to book loss if your target is not achieved by 3 pm.

    2. Bramesh Post author

      A trader needs to be flexible with expectation but “VERY VERY RIGID” with risk management.. Oxygen for trader is his trading capital which needs to be protected..

  2. Sanjay Thaker

    Well said master. By having trading plan means execution becomes easier and you don’t have fear and greed and thus you win psychologically half the battle as you know the stoploss and target in advance.


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