A trading plan typically includes analysis of the overall chart context, identification of trading setups, the definition of trade parameters such as stop loss and targets, setting risk levels for each trade, and pre-defining entry and exit points. The benefits of such a plan include better preparation, increased consistency in trading, improved decision-making and risk management, elimination of emotional responses, and improved trading performance over time.
By consistently applying your trading plan, you’ll be well on your way to becoming a more disciplined, focused, and successful trader. Remember, the goal of a trading plan is not to predict market movements but rather to provide a framework for making sound trading decisions.