A trading plan (Part 1)

One of the best way to not let emotions influence your trading activities is to have a defined trading plan that describes in concrete terms what you will do in any given market scenario.


Many traders do not attempt to have a trading plan because they aren’t really sure where to begin or how to write one. (In that case, I help you with one)


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 trading plan comes in; a trading plan will act as a guide which will keep you on the disciplined trading path.


What are the critical elements of a trading plan?


1) Determine the Trend Direction (How?)


1.1) Pull out your PPTA (Pink & Purple Trend Analysis) and it will show you whether the current price is in Bullish mode, Bearish Mode or Sideway mode.


1.2) A total of 7 scenarios, I will list 2 here. (you do your own homework for the other 5)

PPTA Direction: Bullish

The above chart showed that "ES" has been trading from sideway (pink inside purple) to Bullish mode (pink above purple).


Action: Enter on pullback together with candlestick signals.

PPTA: Bearish mode, price sandwich

PPTA is in bearish mode (widely spread open), but price is trending up. Now is the time to separate PPTA and use it like 2 "TY-Map".


Action: price closed above pink, enter "Long" on pull back candlestick signal.

*Long = Buy

Trading pullbacks is one of the most popular forms of trading among traders and it can be profitable if done properly. Therefore, we prefer a more precise, quantified approached together with exact entry and exit rules in place.

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