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4 Keys To Following Your Trading Plan
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Transcript of 4 Keys To Following Your Trading Plan
Find a way to follow the plan for success
Why Bother With A Trade Plan?
There are at least three really persuasive reasons as to why you should be doing this:
Less stress when dealing with the
market
A trade plan will make it much easier to define your level of risk for a
particular trade
You will always have a baseline to judge your trading performance and improve your
trading results
Something just hasn't "clicked"
What's the key to following your trade
plan?
It must be explicit covering vital details
Any trade plan needs to be thorough enough to ensure that you've at least covered the
basics
Risk per trade What you tradeWhat size you trade When you tradeWhen you don't trade What a setup is
If you know what you should be doing, it's
much easier to see the things that don't fall into this category
You must fully believe in it
There's this gaping chasm between
understanding concepts in principle and believing them to your very core
You need to build trust in it by evaluating it over a number of
trades
Only then will you have the trust in the
trade plan to stick to it
You must be fully focused
Make sure that you know exactly what you
are looking for
You can't place too much importance on single trades
There are many issues that can impact on your ability to follow
your trade plan
Too much importance on a single trade
Not wanting to take a loss
Cutting your winners short fear of missing out
Some trades will be winners and some will
be losers
All trading plans will have winning streaks, losing streaks and will
come in a random fashion
The best way is to theorize, observe, interact, review –
take a systematic approach
Call it the "scientific method" for trading