Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Trade Your Plan And Plan Your Trade

By Michele SchneiderStock MarketsFeb 11, 2021 12:40AM ET
Trade Your Plan And Plan Your Trade
By Michele Schneider   |  Feb 11, 2021 12:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

With crazy market volatility and wide price swings, having a trading plan couldn’t be more important after a day like yesterday.

SPY 5-Minute Chart
SPY 5-Minute Chart

At around 10:20 ET the market began to sell off rapidly, turning into a large drop. Though the market rebounded, such large price swings could have easily gotten traders out of the market if they panicked and sold. No matter what type of trader you are, you should have a plan for every trade or position you have. For day traders this is especially important, as a day like yesterday could easily create some nasty losses. Additionally, these are the types of days where emotions love to jump in and make big decisions for you.

There is a common misconception that trading takes nerves of steel. But nerves of steel are far from needed if you have a trading plan.

All the main decisions to trade successfully can be made before entering the position/trade. Decisions like, how much money am I going to risk on a trade and how much will I expect to make from this trade if it works in my favor? At MarketGauge, we like to risk anywhere from 1-2% of our total portfolio or account size on a single trade. For example, if you have an account size of $10,000 and you risk 2%, that will equal $200.

Here is a quick breakdown of what to do next once you know your risk per trade. Say you decide to buy a stock at $10 with risk to $8. If the price goes to $8 you will exit the trade for a $2 loss per share. Knowing this, how many shares can you buy? Well, if you are only risking a maximum of $200 on a trade then you can buy (200/2 = 100 shares) 100 shares X $10 (entry price) uses $1000 of your $10,000.

This is a great way to help plan out trades to manage how much you are will lose if the trade goes against you.

  • S&P SPY 385 support
  • Russell 2000 IWM Support 218
  • Dow DIA 312 support area
  • NASDAQ QQQ Held 330 support
  • KRE (Regional Banks) Needs to hold $60.00 as new support
  • SMH (Semiconductors) 246.79 resistance. Support 232
  • IYT (Transportation) support 223 the 50-DMA 233 resistance
  • IBB (Biotechnology) 168 support area
  • XRT (Retail) 75.28 support. 80.28 resistance
Trade Your Plan And Plan Your Trade

Related Articles

Trade Your Plan And Plan Your Trade

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email