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Trading Plan

Market update by Nick Radge

Published September 20th, 2021

2018 Global Markets are on track for an interesting year. At the end of each year we can look back and identify aspects of our trading that we could have done better. No one is perfect, and no one knows everything.

Yet the longer you remain active and motivated in this business, the more likely you will strengthen your techniques and skills.

This leads into an important question.

Do you have a trading plan, and if so, are you following it in a disciplined manner?

Whatever your trading strategy; systematic, rule-based or discretionary, we recommend you also have a trading plan. A documented plan that you can view regularly to help track your progress and commitment.

So what are some of the key aspects of a great trading plan?

Firstly, aspiring traders need to understand themselves. Your personality as well as your strengths and weaknesses.

Paramount to growth as a trader is psychology and education. List the skills you already have and identify your weaknesses. You may have a knack for identifying low risk patterns on price charts, or you may have a left brain propensity for coding trading systems.

Look at where your strengths lie and make these a strong aspect of your trading plan.

Then there may be areas that you would like to understand better as part of your future growth as a trader. Where time could be set aside throughout the year to further educate, learn and grow. You may want to learn more about trading futures markets or understanding Elliott Wave theory or time analysis.

Trading plans can be expanded on and made more robust over time. And by robust we don’t mean more complicated. The world’s most successful traders state that following a trading plan with discipline is key, yet that simple is also best.

So make rules in your plan that are simple to follow and commit to. Don’t punish yourself for breaking your rules. Negative reinforcement doesn’t work. Yet rewarding yourself for a successful week of following your trading plan can be a pretty powerful way of staying on the straight and narrow.

The reward may entail knocking off early on a Friday and grabbing a drink with a friend, or a quick 9 holes of golf.

Simply put, rewards enhance repetition.

Trading plans need to be more than bits of paper on your desk.

Many traders believe that setting financial benchmarks every month is the best way towards profitability. This couldn’t be further from the truth.

Your benchmark should be following and sticking to your trading plan.

Planning the trade and then trading the plan needs to be your only focus.

Get away from thinking $ signs and focus more on your trading discipline. From here the profits will follow.

Best of luck with your trading.

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