As the adage goes “ Plan your Trades & Trade your Plans”
Trading Plan is essentially your Business Plan but, the constituents are different from traditional biz-plan. So, lets have an quick look at what should you consider for coming up with your Trading Plan & as usual, we will try to keep it simple.
It is all about 3M’s, YOUR Money, YOUR Method and finally YOUR Mindset
Some Reading material to build your Trading Plan
Trading Plan is essentially your Business Plan but, the constituents are different from traditional biz-plan. So, lets have an quick look at what should you consider for coming up with your Trading Plan & as usual, we will try to keep it simple.
It is all about 3M’s, YOUR Money, YOUR Method and finally YOUR Mindset
- Instrument – Trade highly liquid instruments which cannot be manipulated on long term basis by operators. My current list of instruments which I will try to track & trade - NIFTY, BANKNIFTY, Nifty 50 Stocks etc.
- Timeframe – Define the timeframe of analysis for the trade identification. I will be trading Nifty 50 stocks primarily on positional basis (Daily & Weekly charts) and Nifty, BankNifty Futures for swing opportunities (Hourly & Daily charts).
- Style / Methodology – I’ll be doing a tiny portion of day-trading NIFTY and mainly Swing for NIFTY (NF), BANKNIFTY (BNF) & Positional or delivery based trades on Nifty 50 stocks. Over a period of time will also try to delve into growth & value stock investing
- Risk Reward – Already defined minimum criteria of 1:2
- Potential – Target 25% return on per annum basis. Leveraged trading into NF / BNF futures should give a good kick to the returns planned.
- Contingency – Be prepared for 25% drawdown on your trading account
Some Reading material to build your Trading Plan
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