Your Trading Plan is your blue print to success, your guide to obtaining great wealth from the market. Just like a cooking recipe, a trading plan works best when defined by simplicity. The more complicated it gets, the more room there is for error.

There are literally thousands of brilliant trading plans available to traders, and if you find yourself skipping around from one trading plan to the next without success you have completely missed the point. The success with a Trading Plan comes from the deep understanding an individual trader has of all the strategies and mechanisms within it. 

You can give two traders the very same trading plan and they will achieve very different results. The reason for this is that each person has had different conditioning (the creation of habits) in their upbringing from both their parents and the immediate influences within society, so often each of us deals with the same scenarios differently.

Even with the most general aspects of life, people just can’t seem to do ‘what is required’ to gain the outcomes they desire. Attempts are half hearted with low quality results. It isn’t generally what we are doing; it is how we are doing it that counts.  This all comes back to our psychology and our conditioning. Set goals to properly study and develop your trading plan as it will be your step by step course of action within the chaos of the live markets.

As mentioned earlier, novice traders mistakenly put too much importance on their entries and very little if any on the other areas of trading. A Trading Plan defines all components allowing the trader to know what they need to do, and when they need to do it. At times there will be nothing for a trader to do but wait until their next signal is given. Great patience and discipline must be practiced through these slow times as unfortunately, it is common in human nature for us to feel we need to somehow become involved, as though our intervention can somehow make our position profit faster. This behavior pattern must be avoided.

If none of your trading plan signals are being displayed you must avoid the temptation to suddenly ‘change’ the rules (without back testing) or react to your emotions. A trading plan is a series of strategies all with a high degree of probability in achieving success, covering areas such as:

• Money Management
• Risk Management
• Entry Criteria
• Add Rules
• Profit Taking Rules
• Trailing Stop
• Exit Rules
• Psychology Rules
• Back Testing & Forward Testing