Now that we have gone through the basics of trading in Part 1 of our Trading Guide, Part 2 will be touching on the subject of what are the preparations needed before live trading.
Develop Your Trading Plan
What exactly is a trading plan? A trading plan is like your compass when you are trekking in the dense forest, guiding you to your destination. Whenever you are lost, refer back to your trading plan and follow whatever you have penned down on it. These are the following that needs to be included in your trading plan:
1) Risk Management
This is the foundation of the trading plan. All your strategies should be built around risk-managing in the account. As a guide, for every newly crafted trading strategy, you should be trading the smallest size available at the start and gradually increase the position size as your profit grows.