A trading plan will make trading simpler than it would be if you traded without one.
Think of when you use a GPS.
You enter where you want to go. It then figures out where you currently are and then shows you how to get to where you want to go.
You’re able to constantly check on your GPS to see if you’re still on the right track.
When you make a wrong turn, it knows to make adjustments, and it points you back in the right direction.
A trading plan is your trading GPS. It will show you where you currently are as a trader and help you get to your destination: consistent profitability.
You’re trying to get to this Promised Land called “Consistent Profits,” but since you have no way of knowing whether you’re headed in the right direction, you’ll most likely end up blowing out your account.
With a trading plan, you’re able to know if you’re headed in the right direction.
You’ll have a framework to measure your trading performance. And just like a GPS, you’re able to monitor this continually.
This allows you trade with less emotion and stress.
Without a trading plan, this would be nearly impossible.
Most importantly, if you suck at trading (and you certainly will in the beginning), you will know it is down to one of only two reasons: either there’s a problem in your trading plan or you are not sticking to your trading plan.
If you’re trading without a plan, it’s impossible to know what you’re doing right from wrong.
“If you fail to plan, then you’ve already planned to fail.”
Obviously, a trading plan doesn’t guarantee success, but a good plan that is followed will help you stay in the forex game longer than traders who don’t having a trading plan.
SURVIVAL is better than failure and it should be your first goal as a newbie trader.
Remember, 90% of new traders don’t make it. You want to be part of that special “10%” that does make it.