No matter which trading style fits you best you should have trading plan or you will mostly likely start losing money immediatly. Trading plan is a set of rules you have set for specified trade based on the analysis you have made. Its is important to follow rules of your trading plan if you wish to succedd.
Components of a trading plan:
Position size - You must determine your position size. Each position should be too big to enable you to comeback if your prediciton of market direction is wrong. If you put all your money in one position consequences of wrong predicition are substantial.
Profit exit plan - technical analysis is the best way to determine exit point or profit taking. Usually profit taking occurs at resistance zones, where sellers rush in to take their profits.
Stop loss - Where to exit a losing position must be set before you enter trade and you should change your stop loss in almost no case. When you have a losing position emotions kick in and you are not thinking clearly and you will almost certainly make mistake. Depending on your trading style stop losses are set differently.
Those are the simple rules that you must follow if you want to stay solvent in markets. It is amazing how many traders dont use rules. Rules help you eliminate emotions which forces you to do irrational moves and hurt capital. Developing a trading plan and sticking are two mains ingredients of trading discipline.
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