Writing your own trading plan is like going to the hairstylist, no one likes the process. Yet, it will make you look good!
Trading only suit for those people who are used to make their own decision.
One way to improve your decision making skill is to develop and follow your own trading plan.
The Main Ingredients
The trading plan mainly involve the method and money management. But it starts with your mindset.
Set your mind for trading goals, purpose and the reason why you trade.
Our mind works better when it given certain goals. Our trading will do the same.
The example of trading goals:
"I want to create a consistent 3% profit per month" simple, specific, and realistic
"I want to double my account in 6 months" still realistic, go ahead!
"I want to go to the disneyland with my trading profit!" oh please? You can do a lot better than that.
While for the method, you need to know:
- what to trade, pick only those you master
- when - what session will you involved, also define how many hours you want to stick your eyes to the chart.
- how - are you a trend follower? Therefore, you don't need to trade like a scalper.
Why It Works?
Planning ahead is always better than have no plan at all. But the true reason why we need to develop trading plan is because it will help us, when our emotion turns against us.
The rock solid trading plan will help us back on track when our mind do something that will against our best interest.
When we have our trading plan near, it is easier to spot when and how our emotion comes to play. Thus, we will able to recognize our self better.
Write it Down
The trading plan is need to be written down. Period.
Don't rely your trading account on your memory.
Most of the top traders in the world create a trading mantra to help them get into the trading zone. It is like conditioning our self and be prepared for what ever may happen.
There are many sources about how to create your own trading plan. You may start simple at first, or if you are already have, you may want to revise it as the market change.
