Trading Forex Without A Plan
New to the Forex trading journey and really just care about making money? Nothing more. Just the lifestyle, flashy and luxurious. Fast cars. The parties. Freedom. Financial freedom. All the things a lot of YouTubers will show you or those who claim to be traders on social media because they’ve been trading for a WHOLE 2 MINUTES!!!
Please don’t let the lifestyle fool you. Whether you are new or you’ve been trading for 3-5 years and you’re struggling to find your feet. Traders have the same fundamental requirements in order to be successful. Whether you are willing to put in the work and what is known as chart time in, daily.
Trading the Forex market is so intense and requires your utmost focus, you cannot diddle doddle in and out when you please and expect to be successful. It just isn’t how this works. It requires consistent time, energy, patience, and a degree of passion for it because, without the passion or drive, you may just lose all your money and think it’s a scam.
Why a trading plan is essential!
Now, why are we talking about trading without a plan? Simply because this is where it all starts, no matter how you look at it. I don’t know any Army Generals who went to war without a plan and won a war!
More often than not those who had the best strategic plan that they had studied and become familiar with, won. I heard someone once say that every day you participate in the Forex markets by placing a trade you have basically entered a war and have sent your soldiers to war.
What they meant was the capital you put into the markets are your soldiers and with a greatly executed plan you can come back from the war with either all your soldiers and a few extra from the other camp or you can come back with less but if the plan is executed with objectivity then you can minimize the loss of soldiers.
However, you cannot say the same for an army General with no plan. The war is theirs to be lost and more often than not, all his or her soldiers are taken out either slowly or all in one blow. The same can happen for the trader who has a plan and DOESN’T execute it because they want to try something new with their soldiers in a war instead of trying the new in their practice camps! This too is very dangerous.
So then what is important? – Having a trading plan, sticking to the trading plan with precise execution, and refining it the longer you decide to be in the war or keep going to war. That all comes with a very important teacher, experience.
It is said that 95% (probably even higher now because more people are getting into trading for the wrong reasons) of traders fail and lose all their capital. Have you ever thought to yourself why that is? Yes, No? – I have! And it’s because a lot of people think trading is just an overnight income stream without any effort.
The famous saying ‘I make money in my sleep’ is enticing, but, no one talks about the money they may on occasion also lose in their sleep. Because that isn’t pretty.
What should be included?
A trading plan is there to cover all aspects of trading from; risk management, psychology (market and trading), journaling, technical analysis (your rules and disciplines) which are highly important because if you cannot manage yourself how are you going to manage the markets, emotions and more?
Your trading plan should include what you are willing to risk and for what type of setups. What you look for before entering basically but also the scenarios that would cause you to stay away from the markets. These are equally important too.
Building up a masterpiece of a trading plan that suits your style, character, your perception of the market and what your risk tolerance is, will take some time and so be patient with yourself. Don’t rush the process.
It might sound dumb at first but Eric Thomas said; it takes 20 years for a person to be 20 years old. If the process takes you 6 months, you can’t do it in 1 or if it’s meant to take 4 years you cannot do it in 2. The process is the process, what matters is progress!
In closing, build a trading plan for your soldiers and let your soldiers work for you. And on the days you return with fewer soldiers and you know without a shadow of a doubt that you followed your trading plan, know that the war isn’t over, that was just a battle and now you can learn where you went wrong in the battle, to come back stronger and more prepared.
Let the plan go to work!