In our last blog, we discussed about the Key Point to Identify the direction of RSI Indicators and we learned about a few pointers that can help you to predict and scale up your earning.
Today we will start with the trading plan that you should follow before you make a trade on the stock. Also, we will be talking about the many Do’s and Don’ts that are mostly missed by the traders, as a result, they lose their money in the market. Please do follow these points and include them in your trading plan to make yourself a better trader.
1. S (Stock or Script): – You should know which stock are you going to trade on.
A) R (Reason): – What is the reason for trading on this stock? There can be many reasons, some of them are as follows
- Any crossover given by EMA or MACD depending on the movement of the stock
- Volume or ADX is increasing
- RSI is giving a breakout
Basically, any reason that comes up for trading on a stock.
2. P (Plan): – Always know which strategy you are using and make sure you are following all the rules of that strategy.
3. S (Stop Loss and Target): – Always choose Logical Stop loss and target.
a) For Stop-loss, find logical support or resistance like any EMA or pivot level or any previous level and keep the stop loss just a little below it.
b) For Target find a logical support or resistance level where you feel the price will not go above or below that level.
4. Q (Quantity): – Always know how much quantity you have to trade for according to your capital and your appetite for a Loss. Never go in for a larger quantity if you have any fear or doubt in that trade.
5. T (Time): – Always know for how much time you are going to hold that stock based on your target. For example
- 1 Hour
- 3 hours
- Till the end of the day(Intraday)
- Two days(BTST)
- More than two days
DO’S AND DONT’S
1. Always keep yourself updated on all the latest movements and news (But don’t trade on news)
2. Do homework every day
- Look at least 4-5 charts from the watchlist.
- Check past support and resistance near the current price level.
- Check volume, ADX, and RSI levels on those stocks.
3. Think in terms of percentage, not in terms of money.
4. Follow “SRPSQT”
5. Keep your trade book near you while trading.
6. Keep a regular check all the time frames for intraday (5M, 15M,30M).
7. Think small in Intraday. If you intend to think big then think systematically, have patience. Patience is the key when you’re thinking big.
8. Keep your targets in mind.
9. Keep writing your daily plans.
10. Read books every day.
11. Have patience as per your “T” in SRPSQT.
12. Buy at support. At reversal from the bottom.
13. Sell at resistance. At reversal from the top.
14. Always do the closing and write your journal every day.
1. Never trade on stalks with low or FallingADX.
2. No entry without“SRPSQT”.
3. Do not enter with less energy.
4. Don’t ignore the END GOAL (DailyTarget).
5. If you fear, Exit from the trade or half the quantity.
6. Never regret on a missed opportunity, it creates rush which results in the wrong trade.
7. Don’t think big in Intraday, Only in the longterm.
8. Don’t travel and trade. If you still want to, do it for a smaller quantity.
9. Don’t take more than two trades in a day (Go for the third only if it’s a 5STAR OPPORTUNITY)
10. Never do REVENGE TRADE.
11. Never be Arrogant while trading and after trading.
12. Remove FOMO (FEAR OF MISSING OUT).
13. Never have EGO. Getting wrong trades? Take a break, do with less quantity
14. Don’t focus on profits. Focus on the PROCESS.
15. Never do SCALPING (Random buying and selling looking at small moves)
16. If doing BTST, do it only for a lesser quantity. Especially for options.
17. Never trade by watching the news.
These were some of the trading plan pointers that a traders should keep in mind. These trading plans will always help you in figuring out the trades that can be easily won and the trades that can be won by some techniques, even if there are the chances of loss in that trade. You can earn money even when there are the chances of losing mostly. These trading plans will always keep you on the right path and will make you enjoy trading more and more every time.
Check out our latest video on How to use RSI Divergence Part 2 || Intraday Trading Strategies || Anish Singh Thakur ||
And to watch the first part of the video “RSI Divergence || Intraday Trading Strategy || Anish Singh Thakur || Secret that Traders should know”
Also check out our video on KNOW ABOUT THE STOCK MARKET FROM BASIC TO ADVANCED