To quote that famous line from the eighties television show, The A-Team:  I love it when a plan comes together. With stock trades, I always have a plan, and so do all successful traders. Why is this so important?

First of all, having a plan means you`ve thought about why you`re making the trade in the first place. You have a compelling reason for the trade and you see that it has a good risk-to reward ratio.

Most of the stock securities are traded on what are called stock exchanges. Stock exchanges are where stock traders come together to decide on the price of a stock security. If you have ever watched the open bell being rung at the NYSE you have witness the opening of the day’s trading on an exchange and on a trading floor.

This is an example of a exchange with a real location, with real stock traders yelling and screaming on the trading floor to make their trades. There are also other types of exchanges which are virtual and therefore lacking an actual trading floor. These virtual stock exchanges are made up of a network of computers where the stock trades are executed electronically.