“Plan Your Trade, Trade Your Plan”
“Plan your Trade, Trade Your Plan!” This was the advice I heard from a professional trader when I first got started in this business. At first, it didn’t make much sense to me, but after a couple of trades it began to sink in.
Most of the successful traders I have met all seem to have this basic philosophy. They have learned that they must plan every trade before they ever think of entering the market. And once they are in the market, they must stick to that plan. “My best trades are the ones that I have planned well in advance, and I don’t deviate from that plan once I’m in.” Proclaimed one floor trader I spoke with.
The most successful people in life have a solid plan for how to achieve their goals. This also holds true for most successful traders.
Successful traders set their projections before they ever get into a trade, and when the market gets to their projection, they have no hesitation on getting out of the market. Now if the market should happen to go against their plan, they are also prepared to take their loss.
One of the most important aspects of being a successful trader is how you take losses. Every trader is going to have losses, that’s a fact of trading. It is accepting that fact and dealing with it that will separate successful from unsuccessful traders.
I have seen traders that will literally hold on to a losing position, until every penny they own is gone and they are forced to get out. This is no way to trade. Every trader should trade by the philosophy “the more experience you obtain trading, the better the trader you will become.” There will always be another trade tomorrow, and that trade may be the one that makes your entire year. Always keep faith in your plan and try not to deviate too much from that plan.