A forex trading plan is only effective if it’s followed. You have to stick to it. It sounds simple to do. It is really just common sense but most traders still can’t do it. Why, oh, why?
Trader incompatibility. A trading plan should be a personalized plan for you, a plan that fits your own goals, risk tolerances, and individual lifestyle. You must develop each component on an individual basis, never losing sight of the fact that it must be custom tailored to YOU and YOUR needs.
Not your girlfriend’s. Not your boyfriend’s. Not your basketball coach’s. Not even Ronald, your weirdo best friend whose head is shaped like a hamburger who likes to wear pink polka dot pants and is an aspiring rapper.
Your trading plan must be made based on reality, not on hope. If you’re simply trying to copy somebody else’s trading plan or yours is based on false assumptions, then you will not be compatible with it and will have trouble following it.
Solution: Be honest with yourself. Then revise your trading plan.
Trading plans are intended to be long-term. Many forex traders give up on their trading plan, or often more specifically, the trading system in the trading plan, after suffering a string of losses rather than sticking it out through the inevitable rough times.
Solution: Be patient!
No discipline: Trading according to a plan requires sticking to it through thick and thin. That takes discipline. Rock solid discipline. Forex traders lacking discipline do not stick to their trading plans. You need to be disciplined. Rock solid. Does it sound like we’re beating a dead horse? Well, good.
Solution: Stay disciplined!
Self-destructive behavior: Some forex traders have deeply ingrained psychological issues that will sabotage them. This can be resolved with hard work on one’s self, but the trader must be self-aware of such issues first. You can’t figure out a solution if you don’t know the root problem.
Solution: Look in the mirror. Hopefully you don’t turn to stone.
If you’re personally having trouble sticking to your trading plan, most likely it’s one of the reasons above. If it is, refer to the solution below it.