A great trading plan is the only way to be a great trader. You will feel relaxed and confident in your knowledge and understanding if you stick to your Trading Plan and allow it to be your boss rather than your ego or emotions.
Because you know your strategy will win in the end, no single trade will have a significant negative impact. You will be forced to do the following if you follow a disciplined plan:
- Developing a trading strategy forces a trader to choose a trading style. Will you be a day trader, a position trader, or a follower of long-term trends? You must make a decision.
- You’ll have no choice but to do your homework, study charts, and read books by other traders who have made money in the markets in order to figure out what works.
- When you see entries, they will be crystal clear because you will know exactly what you are looking for.
- You’ll learn to look for opportunities in the market rather than becoming fixated on a single stock, commodity, currency, or market direction.
- Whether you’re using a stop loss or using a trailing stop, you’ll know exactly when it’s time to exit a trade. (You might even have a price goal in mind.)
- A trading plan should prevent you from overtrading by limiting your entries and setting specific parameters.
You’ll have no trouble keeping track of your trades and figuring out why they win or lose.
- It will allow you to focus on trading like a laser.
- A good trading strategy will transform you from a gambler to a casino operator with favorable odds.
Having a great trading plan is the only way to be a great trader.
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