What is a trading strategy?

A trading plan can also help mitigate financial risk, as it eliminates a lot of unnecessary decisions. While having a trading strategy is not mandatory for trading, it can be life-saving at times. If something unexpected happens in the market (and it will), your trading plan should define how you react – and not your emotions. In other words, having a trading plan in place makes you prepared for the possible outcomes. It prevents you from making hasty, impulsive decisions that often lead to big financial losses.

For instance, a comprehensive trading strategy may include the following:

🟢what asset classes you trade
🟢what setups you take
🟢what tools and indicators you use 
🟢what triggers your entries and exits (your stop loss placement)
🟢what dictates your position sizing
🟢how you document and measure your portfolio performance