No Trading Plan, No Success, It’s That Simple.
We go to school to gain knowledge, get a job, or start our own business. We learn what we need to know to be successful, but nothing in our past education or work experience provides the knowledge or psychological control necessary to become a successful trader mainly because there is no well thought out plan.
Unfortunately, it’s our own human nature to assume that if we succeed in one area we will automatically successful in another. Most people who enter the market with the idea of becoming traders have a feeling of invincibility, superiority and wealth. The truth is they have no clue of what they are about to experience. The dream of quick money and financial success can very quickly become a living nightmare. The first step in becoming a successful trader is to understand why so many day traders fail. Answer the following questions: to Having a Trading Plan is Essential
- Would you buy a business if you had no idea what the cash flow would be?
- Would you buy a business if you had little actual experience or training compared to your competition?
- Would you go into a business where your competition was well capitalized and you had limited capital?
- Would you buy a business without a business plan?
If you’re saying, “No way” guess again. That is exactly what you are doing when you start trading for the first time. You must prepare yourself and accept that you are going to be up against some of the best traders in the world. Training, experience, psychological control, and a realization that your are not invincible or smarter than the market will begin to lead you down the path to success. Wall Street is filled with stories of those who did not learn this lesson until it was too late.
Having a Trading Plan is Essential ,Most new traders have the wrong focus. If money is your focus, you have little chance of success. Many new traders look at trading as a way to escape a job they hate. When the trader fails to meet the goal, he begins to push trading beyond his true ability and skill level. The result is a series of losing trades that could have been avoided if the trader had the correct focus, preparation and game plan. Your focus should be about your trading plan not money.
If you follow the plan each day, you are a winner. If the focus is money, it leads to emotion taking over and emotional decisions lead to losses. Successful traders make decisions based on fact and analysis. Do this and money will follow if your trading plan is sound.