As a trader and educator, I have come across thousands of traders during the past 15 years. I can honestly say that I have never met or seen one trader be able to sit down in front of a screen each morning without a trading plan, look at a few charts, start trading, and make money consistently year after year. I am not saying it’s not possible, I have just never seen it. The people you see do well have a trading plan. Of that group that does well, it is typically the people with the short, simple trading plans that do the best. The key is making sure your trading plan is yours, is only filled with essential information, and works for you. Make sure that almost everything that can be a rule, is a rule. These don’t have to be the best rules, the fact that they are rules is what is key, as rules take human emotion and thinking out of trading.
In trading courses, there are a few key questions I encourage students to think about and answer. Once they answer these correctly and objectively, they have the best chance at creating a robust and thorough trading plan that is capable of producing consistent short-term income and long-term wealth. I thought I would share them here for your benefit:
1) Why Do You Want To Trade? The obvious answer is to “make money” but the successful trader takes this much deeper. Are you trying to get to a profit threshold that will allow you to leave your day job and trade from home? Are you retired and want to stop digging into savings to live, so you want to trade to make up for that? Are you trying to create wealth with long-term positions while enjoying your career outside of the markets? When students answer this question properly, it is easy for me to guide them… Continue Reading
