Capital Management and Trading Plan - Crypto Academy / S4W8 - Homework Post for @lenonmc21
Good day all is my pleasure to part take on this assessment am by user name @kingworldline
1.Define and Explain in detail in your own words, what is a "Trading Plan"?
Trading plan have to deal with noted written information which signifies the roadmap to abide on, in order to accomplish the aim which it is planed for.
Therefore where ever there is plan, that is for the future, hence the trading plan is all about layed down rules, decision making, which keeps you in alignment against doing some thing contrary to the rule in trading, hence, this layed downed rules can be general, which involves one or more individuals.
The written down information (Trading plan) are expected to have facts on objectives, profit expectations, capital at hand, time factor, and the risk, involved and period to achieve you aim and how to overcome the plan, All this makes up the trading plan.
Hence an information written down shows the exact plans written down which signify the part to play and and the negative aspect to avoid while sticking on your trading plans.
Hence to achieve your trading plans we have to have some basics like the following
On this aspect to define you goal in the Trading plan, you have to to specific base on the measure you want to apply in trading in terms of amount to invest, all so with time.
Base on this is necessary to understand the area of concentration well before complicating issues, hence is wide known that knowledge to trade on forex has a slit different to crytocurrency and is necessary to understand the operation of each before set.
Hence based on this plan, helps to keep records base on entries, this entries are main to figure out the plans of objective which seem not to function well, there by giving you the rightful and suitable information and plans.
The trading, all this lays at the bed rock of the proper time to enter and exist the market in order to make a reasonable profit without encountering much risk since risk is certain, hence improper management of risk can affect your capital in the market badly. With a proper managent when you invest 100 what of USDT to buy Tron, the psychology their is to understand and dictate when Tron is at point of TD setup or TD Countdown according to Tom Demark which emphasises on when to enter (buy) and when exist (sell) in the market with profit, hence the investment tends to yield above the 100USDT for a successful trade.
The trading plan is a standard and is necessary in for any single or group people who called him or her self a trader need this logical decision planning over the market to attain the ideal trade, hence with a quality plan keepস you out from emotional and sentimental decisions.
On of the benefit of this is that it make the analysis so easy and simple, meanwhile with a plan you already know the exact point to buy and sell, again it gives you the standard to keep on while trading, with a trading plan your goal is already defined in the market.
2.Explain in your own words why it is essential in this profession to have a "Trading Plan"?
Trading is kind of strategic business which requires alot decision making, therefore this are plans you intend to carry out in other to succeed in trading, hence some plans have to be in place which is known as the trading plan.
The trading place gives you this logical ideology to make a decision to over come some emotional decision, hence the following are reasons to have layed down rules of plans for trading.
Hence plan will help to keep you in alignment according to your decision making which can tells you what the future holds for you at appointed time, with a well analyzed plan can tell you when there is fake out in price and when there is market reversal which can hit you capital heavily without proper examination of the entry and exist
The objective is of having trading plan is for you to know and determine when to take profit in order to unnecessary loss, mean while with out the trading trading plans which is basically on emotion you may enquire loss while trying to make much profit from the market, hence is always recommended to know the kind and status of trading you are into, for crytocurrency, trading is highly volatile compare to the forex hence is good to understand and have the knowledge of market you are into.
With out self deisciple you can go contrary to your layed down trading plans, hence the trading plan is as a guildline which you can stick on and maintain your stand while trading, hence self disciple keep you trading in orderliness without deviation and keep you cautious mind alive against any imprompt changes in the market and this teaches you how to trade with proper caution.
As regards to all the this mention above, has a very great impact created in your virtual reasoning towards trade which can enable you to learn from your mistakes and implement the corrections for the future, hence with continous correction on you trading keeps you improving and alive in your trade which involves buying and selling.
Explain and define in detail each of the fundamental elements of a "Trading Plan"
Based on the explanation on this which is basically on the four fundamental plans for trading.
Hence the fundamental factors to consider as follow;
• Risk management
• capital management
• Trading psychology
• The Planning and Control of the Trading
This is all about the management of risk, since is known since the risk is inevitable, there are measure to put in place to subdue risk in trading, hence is necessary to know your risk limit to determine your risk ratio in trading.
Hence risk management in trading is in summary is all about to keep you out from from loss which which May tends to affect your interest and capital.
Capital management give you the sumary of stake, hence is necessary to invest on the risk you can be able carry and to endure, hence is advisable to make use of trade demon for the novice in trading before using real account to avoid loss of assets.
Hence the sustanibility of the account lay on the shoulder of the capital management which which tend to grow based on the risk management.
The trading psychology is the ideal method which is applied to from our internal and intellectual reasoning to hinder against loss in the market, hence the psychology towards the market has to be respected and put in practice, order wise it my result to loss.
Further more the emotion around us should not carry out our psychology away from the market, hence we have to maintain our mind set towards achieving our goal in the market.
Hence you have to get you mind set prepared towards achieving your aim and interest. It is not every time that you have to trade, observe, watch, analyse before engaging in any trade.
As regards to this, it gives a shedule plans which has the upper hand in building up to achieve you goal, hence this is necessary to noted down examined well before execution to ensure a proper establishment.
Build a “Trading Plan” and cover all the basic elements discussed in the class.
Image fro Iqoption
Based on The trading psychology the practical view is shown on the above screenshot which actually shows us on how to avoid risk base on using different indicator as I shown on the below screenshot, i used the RSI indicator to avoid and to manage the risk on TRX /USDT, hence the indicator has two point which is the 30% below and 70% above, hence when ever the trendline get across the 30%support level signify to buy and a well when ever the trend line is above 70% resistance show to sell.
Image fron Binance exchange
Based on capital management I used my Binance exchange account to show how to manage my capital with OCO as hown above, i was able stake my price 63335.00 to take out profit at 61498.00 and with a stop loss at 60059.00 with 100 USDT, therefore the stop loss manages my capital against loss.
Image from microsoft word
Base on the strategy as shown on the above screenshot shows the six months interval, covering from the october to March with the capital, profit, loss and gross profit obtain from every month for the entire six months.
Therefore as crytocurrency is known to be highly volatile, hence it makes trading on it to be so risky due to the fact that is highly volatile, hence this vitality of crytocurrency can be manage with some feature to reduce the risk behind the votality of the market.
Hence to manage these known as risk, they should be layed down principle or measures known as strategy and with the help of indicators to assist in order to place trading in place to make profit.
Hence this measure should have some objective base on psychology effect and as well have effect from the market environ, in order to get the standard required.
Cc: @lenonmc21