Creating a trade plan is when you trade what you see based on a detailed analysis from your technical or fundamental analysis. For technical traders it's beautiful to have at least three confirmation before taking up a trade. Always avoid trading a single confirmation pattern because it only gets you stuck in a trade.
To draft out a plan you have to know how to interpret what your chat is presenting before you by:
- Define the trend(market structure)
You should know the direction of the market if it's moving up, down or sideways by using
Trend lines
Moving averages
- Then you should have an Area of value
You should know a point where the market retests a major zone by using
Support and resistance
Trend lines
- Lastly have an area of Value
This majorly your candle stick confirmation which could be reversal or continuation candles
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Always ensure you trade what you see.