Trading Plan Essentials
The saying “ only the strong survive” is never more true than with trading. With that said, in all its harshness, there is a way to successfully navigate through the trading jungle. Like anything in life, a solid system that is understood and followed will lead us to success and trading is no different. The challenge many new traders fall victim to, is not understanding how to cut out a lot of the markets noise. It takes an experienced Trader to cut through the noise and find success simply by following a system in which opportunities come to them. They do not chase trades and under no circumstances do they push trades based on their own opinion. They simply follow a criteria that they know (through back testing) works more often than not.
Simply put, successful and consistent Traders use a trading plan to navigate the markets. It’s in those trading plans that there are rules that are to be followed that are backed by discipline. A trading plan in this game is a non-negotiable, a must have. Now, they don’t have to be anything over the top or complicated. They simply have to state guidelines that you follow before trading.
For example, a solid trading plan will list particulars such as:
The type of Market Cap’s you’ll trade
Whether you’re a Day/Swing trader