#TradeOfTheWeek

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

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

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 make trades in the event of an adverse price movement.

Investors often want to achieve specific goals; this can sometimes be a percentage of return, while other times it may involve having a certain balance amount. Having a trading strategy serves as a guide in reaching these goals and helps in making decisions such as realizing at least a portion of the return when expectations are met.

A strategic approach enables the investor to approach market movements in a more disciplined manner. This prevents impulsive actions and unplanned trades.

A good strategy ensures that successful trading outcomes can be repeated over time. This provides stability and consistency even in continuously changing market conditions.