There is one trait that successful traders have that unsuccessful forex traders do not: the commitment to build a trading plan and stick with it.
What is a trading plan?
A trading plan is insurance against your own natural human irrationality. Whereas successful business owners create a business plan to set goals, objectives, and paths for reaching each objective, a successful forex trader does the same with a trading plan.
A good trading plan is concrete, actionable, and certain.
A good trading plan shouldn’t say, “Sure, trade it if you feel like it.” Nor should you go into the market without writing down your goals in the first place. Trading plans are not structured to outline your trading system. Trading plans are structured to get you to stick to your forex system.
If you want to trade only on Thursdays, write it down in your trading plan.
If you want to avoid the non-farm payroll report on the first Friday of every month, write it down in your trading plan.
If you want to seek profits of 100 pips per month, then write down your goal in your trading plan.
Trading plans and goals
A trading plan is crafted for no one other than yourself. So, before you consider going into the market without proper planning, realize that no one is going to feel the burden of your lack of planning but you.
Traders have a natural tendency to fly by the seat of their pants. They’re ancy, ready to make money, and unwilling to let anything get between their desire to trade, and their forex trading account. It’s easy to see this way. I saw it this way.
But then I realized that without any goals whatsoever, I was dead meat on the currency markets. Trading as a retail investor, I’m venturing into a world dominated by professional asset managers, investment banks, central banks, and people with more money in the crevices of their couches than I had to my name.
The power of a plan cannot be overstated. If you tread into a $4 trillion daily market, you have to have an edge. Planning is your edge!
