In carrying out trading and investing in stocks, a trader / investor must have a trading plan. If you want to understand how to make a good trading plan, please read the post: Good Stock Trading Plans.
In fact, many traders ignore the importance of a trading plan. Or in a worse case, many traders talk about a trading plan, but they don't have a clear trading plan. The writing in this post, will explain to you about the characteristics of a trader who does not have a trading plan, which can be clearly seen from his daily trading style. This paper is also a material for our evaluation together.
1. It is easy to be tempted to chase stocks that go up very fast, even though they are not fried stocks.
2. Buying shares, but don't know at what price to take profit, and don't know what to do when the shares held go down.
3. (Trader only) When the stock price drops drastically, they still insist on holding and don't want to cut loss.
4. Buying too many stocks, so the portfolio can be filled up to a dozen stocks. This shows that the trader does not have capital management. Capital management is an important element of a trading plan.
5. When you lose, there is always a desire to repay the loss. Traders who have a trading plan will stay slow and cool when they lose.
6. It's easy to be euphoric when the stock market is bullish. For example: Continue to increase the take profit target when you see the stock going up.
7. Try to try all the stocks that look worth buying. Traders who have a trading plan will only trade on a few stocks that have been selected. There are similarities with the first point.
8. It is easy to be tempted to buy stocks based on recommendations. "He said" this stock will go up, then you buy it too. "He said" B this stock will go down, then you sell it too. Traders who have a trading plan will not be easily tempted by the so-called "he said", because the trading plan helps you to stay strong in the face of fluctuations in the stock market.
Those are the characteristics of traders who do not have a trading plan, which I very often encounter in the world of trading (stock market). If you feel you are in these points, then this is the time you should start compiling a trading plan. Trading plan is very useful so that your trading system is tidy. Every trader who can consistently profit from the stock market because they have a trading plan.
