Hello crypto traders. This video is about the trading plan. Unlike a trading strategy, a trading plan outlines only the conditions for opening and closing deals, as well as what to do if an emergency occurs. For example, the computer broke down or the lights were turned off. I will tell you about everything further. Go!
What is a trading plan in cryptocurrency?
A trading plan will save traders from emotional and unprofitable trades and help to use its trading strategy more efficiently. After all, a trading strategy sets out the steps and rules of trading, such as – what, how, and for what instruments to trade? And in the trading plan, recommendations and thoughts are written on how to act in this or that case.
In general, a trading plan is the first document that must be kept on paper or in a Word document on a computer. He will help you follow your trading strategy. After the trading plan, you check your trading strategy, open a deal, close and then analyze the current deal, and write down its result in the trader’s diary. So, a trading plan consists of:
1) Idea. The idea should be confirmed or not. Your idea should be based on the current market situation. 2) Long, Short, or out of the market. You must determine for yourself that you will enter the deal today and at this moment in time, and if so, will it be Long or Short in cryptocurrencies? 3) Emotional states or trading fatigue.
Cryptocurrency Trading Plan – Recommendations
If you have made a lot or lost a lot in one trade, your rule should be not to trade for several days or even weeks. If you don’t want to look at the charts at all, you feel nauseous, you are in a bad mood and you feel that you are exhausted, then it is better to take a vacation for 1-2 months to distract yourself. 4) Extraordinary circumstances. You should know what you will do in case your computer breaks down, power or internet goes out.
For example, if the electricity goes out, you can close or open new deals from your laptop or smartphone. If you have disabled your home Internet, then use mobile Internet or go to a cafe and use Wi-Fi. 5) Trade during travel and leisure. You should know how to deal with your trades and investments during your holidays and travel.
Let’s say don’t trade and exit in USDT. Launch 3commas bots with minimal risk, but for some income to go. Sometimes trade manually from your phone or laptop on the go. Send a deposit to the staking, farming, or mining pool on Binance. And many other options, because if before the rest you do not decide what to do with the deposit, your vacation will turn out like work.
How to write your trading plan crypto
6) Complex trading tactics. If you have one trading strategy, then this point is not needed. However, if you have several trading strategies and styles of cryptocurrency trading, then in this paragraph of the trading plan, you should briefly describe the characteristics of each crypto trading strategy. How do they differ from each other? When should you use one strategy and when should you use another? Etc.
7) Special conditions for opening deals. When the market situation requires it, you should open and close your trades not according to your trading strategy. And these conditions need to be written in the trade plan. For example, strong news came out that there will be a trial on XRP, which means it is better to quickly close a Long deal on XRP. Or you had a prophetic dream that it is better not to trade today.
Or your lower back hurts and you cannot sleep – this is a signal to close the deal in order to be calm. 8) Checklist. It is a summary of your trading strategy, a brief outline of the conditions for opening and closing deals. Usually, the checklist is included in the trading plan or written in a separate document. The checklist indicates, for example – I open a 1D chart, watch a bullish or bearish trend, check the RSI and Moving Average indicators, and much more.
The video about the trading plan in cryptocurrencies is over. I told you 8 points that make up a trader’s trading plan. This, in turn, will help you trade more profitably and more stable. That’s all until new videos on botcryptotrade.com