Disciplined trading is vital for lasting success. Profitable trading requires a combination of skill and odds. The winning trader implements proven trading strategies over and over, so that across a series of trades, the law of averages works in his or her favor. Unless you make trades, you have no chance of winning. It's just like in sports.The more times you try, the more likely you will succeed. An important part of discipline is consistency. When a trader uses one approach one time, and a different approach at another time, performance is haphazard. It is essential to use a strategy consistently, following a specific trading plan on each and every single trade, so that across the series of trades, you will make an overall profit.
If you follow the plan sometimes and abandon it at other times, you throw off the probabilities, but many traders can't seem to stick with their plan. What precipitates a lapse in discipline? Many times, traders forget the consequences of not following a plan. They may suddenly see an opportunity to make a quick profit and decide to abandon risk limits. In another scenario, a trader may question his or her plan, and out of fear, abandon it. How can you make sure you stick with your trading plan?
Many times, we forget why we need to follow a well-defined trading plan. A simple way to remember is to pull out an index card with the reasons and read it over and over again. You might write, "If I abandon my plan, I will lose in the long run." You may also list a few trades where you abandoned your plan and you regretted it. The images of the trade, along with the feelings of regret, will encourage you to stick with your plan. By putting the consequences of abandoning your plan right in front of you so that it is clearly in your awareness, you will be more likely to stick with your plan.
There are other reasons that trading plans are abandoned. One of the main reasons trading plans are abandoned is that they are not specified clearly enough. By specifying every aspect of a trading plan from how much you will risk to when you will enter and exit, you will have an easier time following your plan.
Another reason plans are abandoned concerns fear. When your money is on the line, it's natural to feel afraid. As much as you try to forget, it's hard not to worry about losing money. There are times when you may feel so panicked by the chaotic moves of the markets that you can't think clearly. You may feel agitated and on edge. A detailed trading plan, however, can help you stay calm during the storm of market action. The more clearly the plan is laid out, the easier it is to follow, especially when you are agitated and upset. And when the plan is easy to follow, it's likely that you'll stick with it. You'll be disciplined and in control of your emotions and thinking.
The difference between winning traders and unprofitable ones is the ability to muster unwavering self-control in response to chaotic, ever-changing markets. Trading is serious business. It's not a hobby, but many traders approach the endeavor as if it were recreational gambling. They don't develop a trading plan, and if they do, they tend to abandon it prematurely. Winning traders, however, are methodical. They carefully develop a trading plan, execute it, and stick with their plan. If you want to trade profitably, develop well-defined trading plans and follow them.
If you follow the plan sometimes and abandon it at other times, you throw off the probabilities, but many traders can't seem to stick with their plan. What precipitates a lapse in discipline? Many times, traders forget the consequences of not following a plan. They may suddenly see an opportunity to make a quick profit and decide to abandon risk limits. In another scenario, a trader may question his or her plan, and out of fear, abandon it. How can you make sure you stick with your trading plan?
Many times, we forget why we need to follow a well-defined trading plan. A simple way to remember is to pull out an index card with the reasons and read it over and over again. You might write, "If I abandon my plan, I will lose in the long run." You may also list a few trades where you abandoned your plan and you regretted it. The images of the trade, along with the feelings of regret, will encourage you to stick with your plan. By putting the consequences of abandoning your plan right in front of you so that it is clearly in your awareness, you will be more likely to stick with your plan.
There are other reasons that trading plans are abandoned. One of the main reasons trading plans are abandoned is that they are not specified clearly enough. By specifying every aspect of a trading plan from how much you will risk to when you will enter and exit, you will have an easier time following your plan.
Another reason plans are abandoned concerns fear. When your money is on the line, it's natural to feel afraid. As much as you try to forget, it's hard not to worry about losing money. There are times when you may feel so panicked by the chaotic moves of the markets that you can't think clearly. You may feel agitated and on edge. A detailed trading plan, however, can help you stay calm during the storm of market action. The more clearly the plan is laid out, the easier it is to follow, especially when you are agitated and upset. And when the plan is easy to follow, it's likely that you'll stick with it. You'll be disciplined and in control of your emotions and thinking.
The difference between winning traders and unprofitable ones is the ability to muster unwavering self-control in response to chaotic, ever-changing markets. Trading is serious business. It's not a hobby, but many traders approach the endeavor as if it were recreational gambling. They don't develop a trading plan, and if they do, they tend to abandon it prematurely. Winning traders, however, are methodical. They carefully develop a trading plan, execute it, and stick with their plan. If you want to trade profitably, develop well-defined trading plans and follow them.