A trading strategy is an all-encompassing tool for making trading decisions. It assists you in determining what to trade, when to trade, and how much to trade. A trading plan should be unique to you; you can use someone else’s plan as a guide, but keep in mind that their risk tolerance and available capital may differ significantly from yours.
Your trading strategy can include anything you want, but it should always include the following:
A trading plan differs from a trading strategy, which specifies how to enter and exit trades precisely. ‘Buy bitcoin when it reaches $5000 and sell when it reaches $6000′ is an example of a simple trading strategy.
Why do you require a trading strategy?
A trading plan is necessary because it can assist you in making rational trading decisions and defining the parameters of your ideal trade. A good trading strategy will aid you in avoiding rash decisions made in the heat of the moment. A trading plan has the following advantages: