A forex trading plan is only effective if it is implemented.
You must stick to it.
It appears to be a simple task. It’s very plain sense, yet most traders can’t do it.
Oh, why, why, why?
Incompatibility between traders.
A trading plan should be tailored to you, taking into account your specific goals, risk tolerances, and lifestyle.
You must create each component separately, never losing sight of the fact that it must be personalized to YOU and YOUR needs.
Your trading plan must be based on reality, not hope.
If you’re simply trying to replicate someone else’s trading plan, or if yours is built on erroneous assumptions, you won’t be compatible with it and will struggle to follow it.
SOLUTION: Be truthful to yourself. Then adjust your trading plan.
Trading strategies are designed to be long-term.
Many forex traders abandon their trading plan, or, more specifically, the trading system that is part of the trading plan.
They are unable to bear a series of setbacks. Rather than persevering through the inevitable adversity, they give up.
SOLUTION: Take your time and be patient.
Trading with a plan means sticking to it through thick and bad. That requires self-control. Discipline that is second to none.
Forex traders that lack discipline do not follow through on their trading ideas. You must be disciplined.
Self-destructive behavior: Some forex traders have ingrained psychological disorders that will cause them to fail.
This can be rectified via hard work on oneself, but the trader must first be aware of such concerns. You can’t solve an issue if you don’t know what it is.
When you quit your trading plan, you are rewarded for your lack of discipline, and you may begin to believe that abandoning a trading plan is not a big problem.
Unjustified compensation may raise your proclivity to abandon trade strategies in the future. You might be tempted to think, “I was rewarded once; perhaps I will be rewarded again.” I’ll take a risk.”
However, the benefits of undisciplined trading are usually fleeting, and a lack of discipline eventually leads to forex trading losses.
Distinguish between justified wins from unjustified wins.
When you establish a highly comprehensive trading plan and FOLLOW the plan, you will have a justified win. Success as a result of sticking to a trading strategy is warranted and reinforces discipline.
An undeserved victory comes when you deviate from or entirely abandon the plan. You may be rewarded, but the outcome was random.
To help you make trading decisions, you may flip a coin or hang a printed copy of your charts on the wall and toss darts at it. The win is undeserved and may encourage irrational trading.
SOLUTION: Look at yourself in the mirror.
If you’re having problems sticking to your trading plan, it’s most likely due to one of the reasons listed above. If it is, see the answer below.
Consistency is KEY
Discipline is essential for regular and profitable forex trading.
Trading is all about making the law of averages work in your favor.
The winning trader is the one who first develops the ability to regularly make the shot so that the ball is likely to go through the basket at every feasible occasion.
On each and every trade, one must trade consistently while adhering to a specified trading plan.
If you trade one strategy this time and another afterwards, your performance will most likely be all over the place.
Furthermore, it will be more difficult to determine which strategy works and which does not.
Profitability follows discipline. Don’t allow unwarranted victories undermine your ability to keep discipline.
Follow your trading plan and instill in yourself the belief that if you stick to your plan, you will be more profitable in the long term.