#TradeStories

Establishing a trading strategy provides investors with insights into what to expect in market conditions, while helping them to act in accordance with their financial goals, risk limits, and investment understanding.

Acting on emotions while investing often leads to mistakes. Reactions triggered by fear, greed, and excitement can hinder objective decision-making. Following a specific strategy while trading can help you to overcome emotional reactions and make trading decisions based on more rational and objective reasoning.

A well-designed strategy also considers risk management principles to minimize potential losses. Thus, the investor accepts the risk they are about to take in advance, can set their expectations accordingly, and most importantly, does not panic and trade in the event of an adverse price movement.