The first step in building a trading plan is to realistically take a holistic view of yourself.
The foundation of your trading plan starts with your self-reflection because you will be the only one using it. This self-reflection will reveal your trader profile, which is basically who you are as a trader.
Who you are as a trader will define what kind of method suits you. Strategies, systems, and methods which aren’t compatible with your profile and personality will drastically lower your chances of success.
While most traders want to immediately jump into creating or finding trading systems and strategies, they won’t know which ones match their personality and unique situation if they don’t spend some time on self-reflection first.
Before you think about clicking the Buy or Sell button on your trading platform, there are some questions you should ask yourself so that you can better form your trading plan. While you’re at it, you should write down these answers. Writing down your answers will help remind you of what you’re going to do and help make sure you stick to the plan.
Now are you ready for some Q&A?
In the following sections, we’ll go through some questions that should make clearer what your trading profile is, and how it will shape your trading plan.