By failing to prepare, you are preparing to fail…Benjamin Franklin
Ladies and Gentlemen -welcome to Flying Blind Airlines. We hope you enjoy your trip today from Phoenix to Vancouver. We wish to remind you that the pilot has very few navigational aids, no instrument panel, no co-pilot, and no flight plan and will be flying by the seat of his pants. Alcohol (lots of alcohol) will be served.
As ludicrous as this may appear, it was actually true in the early days of aviation when the pilot flew using his intuition (dead reckoning) and any other skills he managed to muster in the course of his training.
The same thing happens with traders. They have no trading plan and enter the markets with their gut feel, intuition, hot tips or because this or that trade or investment might work. This is recipe for disaster and yet many traders do it over and over again. For an endless variety of reasons, they have failed to make a trading plan. Compounding this is the fact that even those who take the time to make a trading plan are unwilling or unable stay with it and execute it with consistent discipline. It is incongruous to imagine a general going into battle without a plan, a coach going into a professional sports event without a plan, a pilot beginning a flight without a plan, a professional gambler sitting down at the table without a plan, or any elite athlete entering a competitive event without a plan. Unfortunately, traders do this on a disturbingly- consistent basis. If you want to fly by the seat of your pants, then you might be advised to get out of the markets and consider a career in the Cirque du Soleil where people might pay to see your death-defying antics. Whenever you put monies into the markets you are at risk for ruin.
Trading is a journey and a competitive activity. Why would you not plan your trades? Are you relying on someone else to plan them for you? Are you thinking there is something magical about the markets and all you have to do is click the mouse or call your broker and money flows into your account? If any of these are true, you are setting yourself up for failure.
Make a plan. This plan is what resonates with your brain structure, trading personality and money attitudes. Make it as simple as possible and then trade it consistently, day after day. If the plan is not working, change it until you get one that works for you. If it is working and generating profits for you, keep it. Don’t try to fatten it up, give it more bells and whistles or get greedy with it. If it’s broken, fix it and if it isn’t then leave it alone. Keep it simple and keep going with it.
Look at your plan every night after the market close. Write down how it worked for you that day and then contemplate and write down how you will use it the next day. In your nightly preparations and your preparations before the market opens, review your plan, Ensure that you are ready to execute, that you know what you are going to do, when you are going to do it, and then just do it -then execute ruthlessly. This is one way to empower yourself and grow in confidence as a trader. Winning in the markets, sports, business and life is about superior positioning, planning, reviewing, reworking, and executing over and over again until you get it right in a way that is seamlessly competent.
Be Prepared… the meaning of the motto is that a scout must prepare himself by previous thinking out and practicing how to act on any accident or emergency so that he is never taken by surprise…Robert Baden-Powell ( founder of the World Scout Movement)
Janice Dorn, M.D.,Ph.D.
www.thetradingdoctor.com
