There was a famous and very successful basketball coach in the United States that once said, “Failing to plan is planning to fail.” This is even truer when it comes to trading. So many traders fail because they do not have a plan that they follow for their overall trading or even on individual trades they take.
Having an overall trading plan that details how we will trade and protect our capital is critical. If we are not trading well, we need to know how to fix it. By having a plan, we have a base on which we can identify the problem and fix it. Without the plan, we would not know what we were doing wrong. More importantly, to duplicate successes, we need to know what we did to find that success!
Having a plan prepares us for trading. Being prepared is something we all must do as traders. We do not know whether the markets will go up or down. Sure we can anticipate the most probable direction, but a trader will never be 100% sure. So, how can we protect ourselves against inverse market moves? Simple: be prepared!
Preparing for the markets involves identifying any possible… Continue Reading
