A trading plan is a systematic method for identifying and trading securities that takes into consideration a number of variables including time, risk and the investor’s objectives.
The first step to becoming a better trader is abandoning you own opinions, predictions, and emotions in favor of trading the price action itself. Uptrends, downtrends, and trading ranges on charts become more clear when all personal biases are removed.
A trading method is a specific process and theory for approaching the financial markets in an established way to make money. A trading method brings orderliness of thought and behavior for planning and implementing a trader’s action for the philosophy behind entries and exits.
Price action trading creates signals for entering and exiting a chart for profits over time. An entry signal shows when to get in, and the exit signal shows when to get out. We do not trade opinions and predictions about what is happening on the chart. When the winning trades add up to more than the losing trades, we have found an edge. That is what the price action trader is in search of, a trading strategy with an edge.
A trading plan is used to express the actions you will take to express your trading system in the market through entries, exits, and position sizing