Create trade plan system, one by one.

[smb0364]

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[raks]

you are right we should always try to make plan and should go through that if we make plan and go through one bye one that would be really helpfull to make some profit what would be usefull for us and we don't have to fear of loss.

[d5358]

It is important to note that a trading plan developed and tested for the e-minis, for example, will not necessarily perform well when applied to stocks. Separate trading plans may be needed for each instrument or type of instrument (one trading plan, for example, may perform well on a variety of the e-minis). Many traders find it helpful to focus initially on one trading instrument and then add other instruments as trading skills increase.

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Primary Chart Interval that Will Be Used to Make Trading Decisions

Chart intervals are often associated with a particular trading style. Chart intervals can be based on time, volume or activity, and the one you choose ultimately comes down to personal preference and what makes the most sense to you. That said, it is common for longer-term traders to look at longer-period charts; conversely, short-term traders typically use intervals with smaller periods. For example, a swing trader may use a 60-minute chart while a scalper may prefer a 144-tick chart.

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Keep in mind that price activity is the same no matter what chart you choose, and the various charting intervals provide a different view of the markets. While you may choose to incorporate multiple charting intervals in your trading, your primary charting interval will be used to define the specific trade entry and exit rules.

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ndicators and Settings that Will Be Applied to the Chart

Your trading plan must also define any indicators that will be applied to your chart(s). Technical indicators are mathematical calculations based on a trading instrument’s past and current price and/or volume activity. It should be noted that indicators alone do not provide buy and sell signals; you must interpret the signals to find trade entry and exit points that conform to your trading style. Various types of indicators can be used, including those that interpret trend, momentum, volatility and volume.


In addition to specifying technical indicators, your trading plan should also define the settings that will be used. If you plan on using a moving average, for example, your trading plan should specify a “20-day simple moving average” or a “50-day exponential moving average.”

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Rules for Position Sizing
Position sizing refers to the dollar value of your trad, and can also be used to define the number of shares or contracts that you will trade. It is very common, for example, for new traders to start with one e-mini contract. After time and if the system proves successful, the trader may trade more than one contract at a time, thereby increasing potential profits (but also maximizing losses). Certain trading plans may call for additional contracts to be added if a certain profit is achieved. Regardless of your position sizing strategy, the rules should be clearly stated in your trading plan.

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Entry Rules

Frequently, traders are either conservative or aggressive by nature and this often becomes evident in their trade entry rules. Conservative traders may wait for too much confirmation before entering a trade, thereby missing out on valid trading opportunities. Overly aggressive traders, on the other hand, may be too quick to get in the market without much confirmation at all. Trade entry rules can be used by traders who are conservative, aggressive or somewhere in between to provide a consistent and decisive means of getting into the market.

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Trade filters and triggers work together to create trade entry rules. Trade filters identify the setup conditions that must be met in order for a trade entry to occur. They can be thought of as the �safety� for the trade trigger; once conditions for the trade filter have been met, the safety is off and the trigger becomes active. A trade trigger is the line in the sand that defines when a trade will be entered. Trade triggers can be based on a number of conditions, from indicator values to the crossing of a price threshold. Here�s an example:

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Trade filters:


Time is between 9:30 AM and 3:00 PM EST

A price bar on a 5-minute chart has closed above the 20-day simple moving average

The 20-day simple moving average is above the 50-day simple moving average

Once these conditions have been met, we can look for the trade trigger:


Enter a long position with a stop limit order set for one tick above the previous bar’s high

Note how the trigger specifies the order type that will be used to execute the trade. Because the order type determines how the trade is executed (and therefore filled), it is important to understand the proper use of each order type; the order type should be part of your trading plan

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Exit Rules

It is often said that you could enter a trade at any price level and make it profitable by exiting at the appropriate time. While this seems overly simplistic, it is quite true. Trade exits are a critical aspect of a trading plan since they ultimately define the success of a trade. As such, your exit rules require the same amount of research and testing as your entry rules.


Exit rules define a variety of trade outcomes and can include:


Profit targets

Stop loss levels

Trailing stop levels

Stop and reverse strategies

Time exits (such as EOD – end of day)

As with trade entry rules, the type of exit orders that you use should be clearly stated in your trading plan. For example:


Profit target: Exit with a limit order set 20 ticks above the entry fill price

Stop loss: Exit with a stop order set 10 ticks below the entry fill price

Note: The remaining order will have to be canceled to avoid entering an unintended position

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Having a Forex trading plan is one of the most important pieces of the puzzle of becoming a consistently profitable Forex trader. Yet for many traders, creating a Forex trading plan can seem like something of a mystery, or perhaps something that they “will do eventually”…

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It is this lazy type of thinking that gets many traders into trouble and causes them to blow out trading accounts. Success in the markets is a function of discipline, and most people simply do not have enough self-discipline to determine if they are trading emotionally or objectively. This is where having a defined forex trading plan comes in; a trading plan will act as a guide which will keep you on the disciplined trading path

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Having a written out pre-defined trading plan means you are making an effort to hold yourself accountable to something, this is necessary to forex trading success because there is no one to be accountable to as a trader. You have only yourself to be accountable to when trading the markets and it can be extremely difficult to do the BEST THING FOR YOUR TRADING ACCOUNT when it goes against everything you FEEL like you want to do. This is the entire point of having a forex trading plan; to have a physical reminder of what the best thing for your trading account is at any given time…

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The more you push and struggle by over-analyzing market variables the more your trading account is going to suffer, this is one of the biggest psychological paradoxes and hurdles that traders need to overcome before they can realize their full potential as market technicians. This fact is directly related to the concept that patience in Forex trading is rewarded by the market. Patience is one of the best and most important virtues that any forex trader can have. Being patient and waiting for only the “best” price action setups will greatly improve not only your win rate but also your confidence, because when you are trading with a high accuracy you are naturally going to boost your confidence.

[loys]

no i never create it before so one of them by learning the fundamentals and market sentiment straegi,,, mastery of emotional and psychological trader also must be prepared ... and,, so that we can produce a stable green line every day of the margin call, MM and mastery of the target and lots when trading should, okey ?

[d5358]

While discretionary traders do not always operate under a specific set of trading rules, system traders require a comprehensive trading plan that takes the guesswork out of trading and provides consistency over time. In this section, we will discuss how to develop a trading plan; the next section, “Backtesting and Forward Performance Testing” introduces the various methods used for testing the viability of a trading plan.

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Developing a Trading Plan

A trading plan is a written set of rules that defines how and when you will place trades and includes the following components:

Market(s) That Will Be Traded

Today’s traders are not limited to stocks; you have a wide selection of instruments from which to choose, including bonds, commodities, currencies, exchange traded funds, futures, option and the e-minis (such as the e-mini S&P 500 futures contract). In order for trading to be successful, however, any chosen instrument must trade under good liquidity and volatility.


Liquidity describes the ability to execute orders of any size quickly and efficiently without causing a significant change in price. In simple terms, liquidity refers to the ease with which shares (or contracts) can be bought and sold. Liquidity can be measured in terms of:


Width – How tight is the bid/ask spread?

Depth – How deep is the market (how many orders are resting beyond the best bid and best offer)?

Immediacy – How quickly can a large market order be executed?

Resiliency – How long does it take the market to bounce back after a large order is filled?

Markets with good liquidity tend to trade with tight bid/ask spreads and with enough market depth to quickly fill orders. Liquidity is important to traders because it helps ensure that orders will be:


Filled

Filled with minimal slippage

Filled without substantially affecting price

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Volatility, on the other hand, measures the amount and speed at which price moves up and down in a particular market. When a trading instrument experiences volatility, it provides opportunities for traders to profit from the change in price. Any change in price – whether rising prices in an uptrend, or falling prices during a downtrend – creates an opportunity to profit; it is difficult to make a profit if price stays the same.

[sguha]

sir forex trading karne ki liye ham trader ko yaha par pahele investment karna parte hai or uske bad us strategy ko apne demo account me use karna parte hai , ham jitna yaha par demo account me safal honge thik utna hi ham trader asly account me safal ho sekte hai .

[d5358]

Systems traders, on the other hand, follow the trading system’s logic exactly. Because system trading is based on an absolute set of rules, this type of trading is well-suited to partial or full-trade automation. For example, a system can be coded using your trading platform’s proprietary language, and once the strategy is “turned on” the computer handles all trading activity (including identifying trades, order entries, management and exits).

[d5358]

How to Profit from Symmetrical Triangles
Symmetrical triangles are very reliable. You can profit from upwards or downwards breakouts. You’ll learn more about how to earn from downtrends when we talk about maximizing profits.

If you see a symmetrical triangle forming, watch it closely. The sooner you catch the breakout, the more money you stand to make.

Watch For:

Sideways movement, a period of rest, before the breakout.
Price of the asset traveling between two converging trendlines.
Breakout � of the way to the apex.
Set Your Target Price:

As with all patterns, knowing when to get out is as important as knowing when to get in. Your target price is the safest time to sell, even if it looks like the trend may be continuing.
For symmetrical triangles, sell your stock at a target price of:

Entry price plus the pattern’s height for an upward breakout.
Entry price minus the pattern’s height for a downward breakout.

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Ascending and Descending Triangles: The Traditional Bull and Bear
When you notice a stock has a series of increasing troughs and the price is unable to break through a price barrier, chances are you are witnessing the birth of an ascending triangle pattern.


Ascending Triangle Pattern
Confirm your ascending triangle pattern by drawing a horizontal line tracing the upper price barrier and a diagonal line tracing the series of ascending troughs.

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The descending triangle is the bearish counterpart to the ascending triangle.


Descending Triangle Pattern
Confirm your descending triangle by drawing a horizontal line tracing the lower price barrier and a diagonal line tracing the series of descending troughs.
The ascending and descending patterns indicate a stock is increasing or decreasing in demand. The stock meets a level of support or resistance (the horizontal trendline) several times before breaking out and continuing in the direction of the developing up or down pattern.

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How to Profit from Ascending and Descending Triangles
Ascending and descending triangles are short-term investor favorites, because the trends allow short-term traders to earn from the same sharp price increase that long-term investors have been waiting for. Rather than holding on to a stock for months or years before you finally see a big payday, you can buy and hold for only a period of days and reap in the same monster returns as the long-time stock owners.

As with many of our favorite patterns, when you learn to identify ascending and descending triangles, you can profit from upwards or downwards breakouts. That way, you’ll earn a healthy profit regardless of where the market is going.

Watch For:

An ascending or descending pattern forming over three to four weeks.
Set Your Target Price:

For ascending and descending triangles, sell your stock at a target price of:

Entry price plus the pattern’s height for an upward breakout.
Entry price minus the pattern’s height for a downward breakout.

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Head and Shoulders: A ChartAdvisor Staple
The head and shoulders pattern is a prevailing pattern among short sellers, investors who profit from downtrends. After three peaks, the stock plummets, offering a textbook, high-return opportunity to traders who catch the trend early.

Head and Shoulders Pattern
Head and shoulder patterns are characterized by a large peak bordered on either side by two smaller peaks. Draw one trendline, called the neckline, connecting the bottom of the two troughs.
The first trough is a signal that buying demand is starting to weaken. Investors who believe the stock is undervalued respond with a buying frenzy, followed by a flood of selling when traders fear the stock has run too high. This decline is followed by another buying streak which fizzles out early. Finally, the stock declines to its true worth below the original price

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How to Profit from the Head and Shoulders Pattern
Short sell as soon as the price moves below the neckline after the descent from the right shoulder.
Set Your Target Price:
For the head and shoulders pattern, buy shares at a target price of:

Entry price minus the pattern’s height (distance from the top of the head to the neckline).

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Introduction 1
Symetrical Triangle 2
Ascending/Descending Triangle 3
Head & Shoulders 4
Double/Triple - Bottom/Top 5
Minimizing Risk 6
Maximizing Profit 7
Conclusion 8
Profitable Patterns Number Four and Five

Triple and Double Bottoms and Tops: Reversals upon reversals
When you see a W or M pattern forming, you may have just discovered a money-making double bottom or double top pattern. These patterns are common reversal patterns used to suggest the current stock trend may be likely to shift.

But don’t panic if your double bottom or double top patterns do not develop as you had originally thought. You haven’t lost your chance for cash. If your W or M pattern reverses for a fourth time, you could now be working with the profitable triple bottom or triple top.

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Double Bottom Pattern

Double Bottom Pattern
A small peak is surrounded by two equal troughs.
Purchase When:

The price exceeds the middle-peak price.
Watch For:

A price increase of 10% to 20% from the first trough to the middle peak.
Two equal lows, not to differ by more than 3% or 4%.
Set Your Target Price:

For the double bottom pattern, sell your stock at a target price of:

Entry price plus the pattern’s height (distance from the peak to the bottom of the lowest trough).

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Double Top Pattern

Double Top Pattern
A small trough is surrounded by two equal peaks.
Short Sell When:

The price drops below the middle-trough price.
Watch For:

A price decrease of 10% to 20% from the first peak to the middle trough.
Two equal highs, not to differ by more than 3% or 4%.
Set Your Target Price:

For the double top pattern, buy shares at a target price of:

Entry price minus the pattern’s height (distance from the trough to the top of the highest peak).

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Triple Bottom Pattern

Triple Bottom Pattern
Three equal troughs amid a series of peaks.
Purchase When:

The price exceeds the resistance established by the prior peaks.
Watch For:

A series of three identical troughs at the end of a prolonged downtrend.
Set Your Target Price:

For triple bottom patterns, sell your stock at a target price of:

Entry price plus the pattern’s height (distance from the resistance to the bottom of the lowest troug

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Triple Top Pattern

Triple Top Pattern
Three equal peaks amid a series of troughs.
Purchase When:

The price falls below the support that formed from the prior troughs.
Watch For:

A series of three peaks at relatively the same level.
Set Your Target Price:

For triple top patterns, buy shares at a target price of:

Entry price minus the pattern’s height (distance from the support to the top of the highest peak).

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Now You Know
The five most profitable stock patterns:

symmetrical triangle
ascending and descending triangles
head and shoulders
double top and double bottom
triple top and triple bottom
You’re halfway through your ChartAdvisor toolbox. But you still need a couple more nuts and bolts to ensure high-dollar profits in the market. Before you’re ready to invest, you’ll want to learn how best to cut your losses and maximize your returns

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How To Start Trading: Trading Plan Development

Before learning about trading plan development, it is important to note the difference between discretionary and system traders. Traders typically fall into one of two broad categories: discretionary traders (or decision-based traders) who watch the markets and place manual trades in response to information that is available at that time, and system traders (or rules-based traders) who often use some level of trade automation to implement an objective set of trading rules.

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Because it is often viewed as easier to jump into trading as a discretionary trader, that’s where most traders start, relying on a combination of knowledge and intuition to find high-probability trading opportunities. Even if a discretionary trader uses a specific trading plan, he or she still decides whether or not to actually place each trade. For example, a discretionary trader’s chart may show that all criteria have been met for a long trade, but they may skip the trade if the markets have been too choppy that trading session.

[d5358]

Set Risk Level
How much of your portfolio should you risk on any one trade? It can range anywhere from around 1% to as much as 5% of your portfolio on a given trading day. That means if you lose that amount at any point in the day, you get out and stay out. This will depend on your trading style and risk tolerance. Better to keep powder dry to fight another day if things aren't going your way

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Set Goals
Before you enter a trade, set realistic profit targets and risk/reward ratios. What is the minimum risk/reward you will accept? Many traders will not take a trade unless the potential profit is at least three times greater than the risk. For example, if your stop loss is a dollar loss per share, your goal should be a $3 profit. Set weekly, monthly and annual profit goals in dollars or as a percentage of your portfolio, and re-assess them regularly

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Do Your Homework
Before the market opens, what is going on around the world? Are overseas markets up or down? Are index futures such as the S&P 500 or Nasdaq 100 exchange-traded funds up or down in pre-market? Index futures are a good way of gauging market mood before the market opens. What economic or earnings data is due out and when? Post a list on the wall in front of you and decide whether you want to trade ahead of an important economic report. For most traders, it is better to wait until the report is released than take unnecessary risk. Pros trade based on probabilities. They don't gamble.

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Trade Preparation
Before the trading day, reboot your computer(s) to clear the resident memory (RAM). Whatever trading system and program you use, label major and minor support and resistance levels, set alerts for entry and exit signals and make sure all signals can be easily seen or detected with a clear visual or auditory signal. Your trading area should not offer distractions. Remember, this is a business, and distractions can be costly.

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Set Exit Rules
Most traders make the mistake of concentrating 90% or more of their efforts in looking for buy signals, but pay very little attention to when and where to exit. Many traders cannot sell if they are down because they don't want to take a loss. Get over it or you will not make it as a trader. If your stop gets hit, it means you were wrong. Don't take it personally. Professional traders lose more trades than they win, but by managing money and limiting losses, they still end up making profits.

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Set Exit Rules
Most traders make the mistake of concentrating 90% or more of their efforts in looking for buy signals, but pay very little attention to when and where to exit. Many traders cannot sell if they are down because they don't want to take a loss. Get over it or you will not make it as a trader. If your stop gets hit, it means you were wrong. Don't take it personally. Professional traders lose more trades than they win, but by managing money and limiting losses, they still end up making profits.

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Before you enter a trade, you should know where your exits are. There are at least two for every trade. First, what is your stop loss if the trade goes against you? It must be written down. Mental stops don't count. Second, each trade should have a profit target. Once you get there, sell a portion of your position and you can move your stop loss on the rest of your position to break even if you wish. As discussed above, never risk more than a set percentage of your portfolio on any trade.

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et Entry Rules
This comes after the tips for exit rules for a reason: exits are far more important than entries. A typical entry rule could be worded like this: "If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here." Your system should be complicated enough to be effective, but simple enough to facilitate snap decisions. If you have 20 conditions that must be met and many are subjective, you will find it difficult if not impossible to actually make trades. Computers often make better traders than people, which may explain why nearly 50% of all trades that now occur on the New York Stock Exchange are computer-program generated. Computers don't have to think or feel good to make a trade. If conditions are met, they enter. When the trade goes the wrong way or hits a profit target, they exit. They don't get angry at the market or feel invincible after making a few good trades. Each decision is based on probabilities

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Keep Excellent Records
All good traders are also good record keepers. If they win a trade, they want to know exactly why and how. More importantly, they want to know the same when they lose, so they don't repeat unnecessary mistakes. Write down details such as targets, the entry and exit of each trade, the time, support and resistance levels, daily opening range, market open and close for the day and record comments about why you made the trade and lessons learned. Also, you should save your trading records so that you can go back and analyze the profit or loss for a particular system, draw-downs (which are amounts lost per trade using a trading system), average time per trade (which is necessary to calculate trade efficiency) and other important factors, and also compare them to a buy-and-hold strategy. Remember, this is a business and you are the accountant.

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Perform a Post-Mortem
After each trading day, adding up the profit or loss is secondary to knowing the why and how. Write down your conclusions in your trading journal so that you can reference them again later.

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The Bottom Line
Successful paper trading does not guarantee that you will have success when you begin trading real money and emotions come into play. But successful paper trading does give the trader confidence that the system they are going to use actually works. Deciding on a system is less important than gaining enough skill so that you are able to make trades without second guessing or doubting the decision.

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There is no way to guarantee that a trade will make money. The trader's chances are based on their skill and system of winning and losing. There is no such thing as winning without losing. Professional traders know before they enter a trade that the odds are in their favor or they wouldn't be there. By letting their profits ride and cutting losses short, a trader may lose some battles, but they will win the war. Most traders and investors do the opposite, which is why they never make money.

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Traders who win consistently treat trading as a business. While it's not a guarantee that you will make money, having a plan is crucial if you want to become consistently successful and survive in the trading game.

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Trade Like a Top Hedge Fund
What can technical traders see that you don’t? Investopedia presents Five Chart Patterns You Need to Know, your guide to technical trading like the pros.

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The Symmetrical Triangle: A Reliable Workhorse
You’ll recognize the symmetrical triangle pattern when you see a stock’s price vacillating up and down and converging towards a single point. Its back and forth oscillations will become smaller and smaller until the stock reaches a critical price, breaks out of the pattern, and moves drastically up or down.

The symmetrical triangle pattern is formed when investors are unsure of a stock’s value. Once the pattern is broken, investors jump on the bandwagon, shooting the stock price north or south.


Symmetrical Triangle Pattern
To form your symmetrical triangle pattern, draw two converging trendlines that bound the high and low prices. Your trendlines should form (you guessed it) a symmetrical triangle, lying on its side.

[sajid1240]

You also need to test your strategy using demo account. You cannot use a strategy without testing it so that we can produce a stable green line every day of the margin call, MM and mastery of the target and lots when trading should also be well understood...