How to Create an Easy Stock Trading Plan

  Investing without a plan is like going without direction. I didn't know where to go, so I got lost.

Just like life, stock investing requires a mature plan in order to achieve goals. Same with stock trading.

This is the importance of making a stock trading plan. Stock trading plan will provide instructions for you what to do, including strategies to buy and sell shares.

That way, you can take transaction decisions according to the scenario or plan that has been prepared to achieve stock investment goals.

How to Create an Easy Stock Trading Plan

Understanding Stock Trading Plan

Stock trading plan is a planning activity before trading stocks. In making a stock trading plan, you can compile or list important components as a 'compass' when buying and selling shares.

Unfortunately, although very vital, many investors do not have a trading plan. Stock trading is just a follow-up.

FOMO (Fear of Missing Out) has become a phenomenon among young people. Included in the business of investing or trading stocks. Feeling afraid of losing or missing out, so choose the way to follow along.

That's because they are confused, do not know what to do and how when trading stocks. As a result, it could just be a tails-up. 

It's this style of follow-up that makes it dangerous. On social media is being discussed the benefits of shareS A, so do not buy the shares.

Whereas admins, netizens, even artists and influencers who review are not stock analysts. Fundamental analysis that is the basis of the science of stock investment is not necessarily they understand.

Participating in stock trading can plunge you into the deepest abyss. Not profit, but even buntung alias loss. This will happen to investors without a trading plan.

How to Create a Stock Trading Plan

Most people are lazy to make a stock trading plan because it is considered difficult, njelimet, and brain drain. Want an anti-complicated one? Here's how to make an easy stock trading plan, where you have to include these important components:

1. Shares you want to buy

How to make the first stock trading plan begins with determining what shares you want to buy. Monitor the movement of the stock price, the financial statements, and other analysis.

If you want to find safe, look for tier one or blue chip stocks or superior stocks in the LQ45 index with good performance, strong fundamentals, and not easy 'fried.'  

2. Put the purchase price of the shares

The next step to making a stock trading plan is to determine the buy level. At what price will you buy the shares.

This is called buying instead of feeling or feeling. Must have a mature and clear plan, because the feeling can not work in the stock market.

You have a benchmark share purchase price. If the stock price doesn't fit the scenario or plan, you won't buy it.

For example, ABCD's current share price is Rp 3,000 per share. You have done an analysis, read the stock chart that there is a potential stock price to fall to Rp 2,850.

So you put the purchase price at Rp 2,850. If it turns out that the stock price movement has not led to that level in a few days, or slumped to a price of Rp 2,800, then hold not to buy.

Even with other targeted shares. Must have a strategy to buy at what price. Thus, you are not encouraged to trade often.

3. Put the selling price of the shares

Determining the selling price of the stock must also be included in your trading plan. Want to sell the shares at what price, must have a target.

If you don't put up a selling level, you'll be confused. Don't know what to take, finally all-round feeling.

For example, you buy ABCD shares according to the planned price, which is Rp 2,850 per share. Then you put the selling price of the stock at the level of Rp 3,050 from the results of the analysis will occur a reversal of direction from downtrend to uptrend. 

Unexpectedly, on the same day you buy, ABCD shares strengthened to the level of Rp 2,960. Actually, if you sell directly, you can get capital gains.

But because you already have a trading plan and believe ABCD shares will continue to rise based on analysis, you do not lust to release the stock.

4. Calculate profits and risks

After setting the buy price and selling price of the stock, you can calculate the potential profit. For example, the purchase price target of Rp 1,000, the selling target of Rp 1,500, means a potential profit of 50%.

In addition, this strategy can also calculate how much the stock risks failing to rise and eventually move down. That way, you can accept this risk.

5. Cut loss

In stock trading does not always go according to plan. There is a possibility that the trading plan missed. The price of the shares purchased did not move as expected and continued to plunge freely.

If you experience this condition, you can take the cut loss step. A cut loss is selling a stock at a price lower than the purchase price.

Cut loss is an emergency strategy that can be taken to prevent greater losses due to the stock price that continues to decline.

Cut loss is highly recommended by traders and investors to keep the capital owned and not stuck in an adverse position.

Create a Stock Trading Plan First, New Action!

Both traders and investors must create a stock trading plan in advance in order to establish the right strategy. The goal is to reap large profits and minimize risk.

In the world of investing, how to make a trading plan not only applies to stocks, but also how to make a forex, crypto, and other investments. So, let's make a trading plan first, new action!