Having a plan is crucial to success. This might seem like a trite statement, but very often, people act on a whim, without thinking through the long-term consequences. This is true even in trading, and like most things, trading requires planning if one wants to reach long-term profitability. A trading plan should contain tried-and-true methods that have proven to lead to winning trades.
There are different kinds of plans. Some like trading purely on technical signals, looking at charts and indicators to make their decisions. Some prefer more subjective styles, looking at market sentiments and fundamental analysis, while others use a mix of both.
There are pluses and minuses to both styles, and the one you should choose will always depend on you, on your likes, skills, strengths, and personality. To create a consistent, profitable plan, you first need to think about what sort of style works best for you.
For example, you may want to start by thinking about which crypto trading techniques work best for you, or have historically shown you the best results. Maybe you’re a whiz at candlestick charts and can easily intuit trends that pay off - then you may want to think about formulating a technical trading plan relying on technical signals. Or maybe you’re an analyst, and you like poring over the news - then you may want to try a more subjective, discretionary method.
Timing and Skillsets
How much time you can dedicate to trading matters as well. If you have a full-time day job, then you may not want to pick a style that requires constant monitoring of your positions. A plan that focuses on medium-term trading and allows you to leave positions open for a while would suit you better. Or, if you have more time to dedicate, then you may want to place a lot of short-term trades that you can track in real time, for a scalp trading approach.
Your skills matter too. If you’re a programmer, then you may want to invest in developing your own assistant or expert system to place trades for you based on clear technical signals. While that sort of approach can take a lot of your time, it can be rewarding in the long run as you won’t need to track your trades personally.
If you’re a business expert, then you can make use of technical analysis and reports generated by others, even for pay - that may just give you the edge you need to make a profit. Ultimately, your choice of trading plan will depend on what you bring to the table, and how much time you want to dedicate to trading.
