Preschool>= Lesson Status ?
Kindergarten>= Lesson Status ?
Elementary>= Lesson Status ?
Grade 1 Support and Resistance Levels
Grade 2 Japanese Candlesticks
Grade 3 Fibonacci
Grade 4 Moving Averages
Grade 5 Common Chart Indicators
Middle School>= Lesson Status ?
Grade 7 Important Chart Patterns
Grade 8 Pivot Points
Summer School>= Lesson Status ?
High School>= Lesson Status ?
Grade 9 Trading Divergences
Grade 10 Market Environment
Grade 11 Trading Breakouts and Fakeouts
Grade 12 Fundamental Analysis
Grade 13 Currency Crosses
- What is a Currency Cross Pair?
- Crosses Present More Trading Opportunities
- Cleaner Trends and Ranges
- Taking Advantage of Interest Rate Differential
- Obscure Crosses
- Planning Around News and Fundamentals
- Creating Synthetic Pairs
- Euro and Yen Crosses
- How to Use Crosses to Trade the Majors
- How Cross Currency Pairs Affect Dollar Pairs
- Summary: Currency Crosses
Grade 14 Multiple Time Frame Analysis
Undergraduate>= Lesson Status ?
- Why Keep a Trade Journal?
- Benefits of Keeping a Journal
- What Should You Record in Your Journal?
- Potential Trading Area
- Entry Trigger
- Position Sizing
- Trade Management Rules
- Trade Retrospective
- Trading Journal Statistics
- Reviewing Your Trading Journal
- Difficulties of Keeping a Trade Journal
- Summary: Keeping a Trade Journal
Graduation>= Lesson Status ?
- Which Trading Style is Best for You?
- Which Currencies Should You Trade?
- What is Your Level of Trading Experience?
- Should You Be a Discretionary, Mechanical, or Hybrid Trader?
- What Kind of Mechanical System Suits Your Personality?
- What is Your Attitude Towards Risk?
- What Kind of Stop Suits Your Trading Style?
What is a Trading Plan?
Now that you're about half way through college, here's one piece of advice you should always remember.
Be your own trader.
Don't follow someone else's trading advice blindly. Just because someone may be doing well with their method, it doesn't mean it will work for you. We all have different market views, thought processes, risk tolerance levels, and market experience.
Have your own personalized trading plan and update it as you learn from the market.
With rock solid discipline, your trading could look like this.
Developing a Trading Plan and sticking to it are the two main ingredients of trading discipline.
But trading discipline isn't enough.
Even solid trading discipline isn't enough.
It has to be rock solid discipline.
We repeat: rock solid. Like Jacob Black's abs.
Plastic solid discipline won't do. Nor will discipline made from straws and sticks.
We don't want to be little piggies. We want to be successful traders!
And having rock solid trading discipline is the most important characteristic of successful traders.
A trading plan defines what is supposed to be done, why, when, and how. It covers your trader personality, personal expectations, risk management rules, and trading system(s).
When followed to, a trading plan will help limit trading mistakes and minimize your losses. After all, "if you fail to plan, then you've already planned to fail."
A trading plan removes any bad decision making in the heat of the moment. Your emotions can consume you when money is on the line, causing you to make irrational decisions. You don't want that to happen.
The best way to prevent it from happening is to minimize (notice we did not say eliminate) thinking by having a plan for every potential market action.
With the right trading plan, every action is spelled out, so that in the heat of the moment you don't have to make any rash decisions. You just simply stick to your trading plan.
Before we continue, we have to quickly distinguish the difference between a trading plan and a trading system.
A trading system describes how you will enter and exit trades. A trading system is part of your trading plan but is just one of several important parts, i.e., analysis, executions, risk management, etc. Since market conditions are always changing, a good trader will usually have two or more trading systems in his or her trading plan.
Trading systems will be covered more in-depth later on in the lesson, but we thought that it was important to point out the difference between the two upfront to avoid any confusion.
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- What is a Trading Plan?
- Why Do you Need a Trading Plan?
- Justified vs. Unjustified
- Getting to Know Yourself
- Motivation and Goal Setting
- Risk Capital
- Lifestyle Considerations
- Daily Pre-Market Routine
- Weapons of Choice
- Stick to the Plan
- Summary: Developing a Trading Plan