What is a Trading Plan?"A trading plan is a complete set of rules that covers every aspect of your trading life. Many experts refer to the need to have an ‘edge’ which will tip the balance of probabilities of success in your favour." Say Tim Wilcox who wrote and shared a simple but powerful trading plan template int he trade2win forum about 10 years ago.
Everyone Needs a Trading Plan. If you don't have one, anything you do is a mistake.A trading plan will make the act of trading simpler than it would be if you traded without one. It will limit your opportunity to make bad trades and it will prevent many psychological issues from taking root.
9 Reasons Why YOU should have a Trading Plan[How to be a consistently successful trader? Have a Plan]
- Relaxed, stress free trading that is simpler with a plan than it is without one
- Ability to monitor your progress, diagnose faults and amend the plan accordingly
- A plan helps to prevent many psychological issues from taking root
- A plan that is adhered to strictly will reduce the number of bad trades
- A plan will help prevent irrational decisions in the heat of the moment
- A plan enables you to control the only thing you can control - yourself
- Professional traders are highly disciplined. A plan will instil a large measure of discipline into your trading. Gamblers tend to lack both discipline and a plan
- A plan will enable you to trade outside your comfort zone. How many times have you let a loss run and cut a profit short because it was the comfortable thing to do? A plan, executed with discipline, will help to prevent this from happening
- A plan is your roadmap which will enable you to get from wherever you are now to wherever you want to be – i.e. consistent profitability
All credit goes to Tim Wilcox for sharing this knowledge and to Steve of www.for-exe.com for sharing the link/document with us. Tim has shared a Trading Plan Template that should help all traders at any stage of their trading to formulate a great trading plan.
The template (and, by implication, your plan) – is designed in such a way that if you do take a ‘wrong turn’ on your roadmap, you will know about it very quickly and have the opportunity to correct the problem before losses spiral out of control.
Link to Trading Plan Template