You can be your own trader.
In other words, don’t blindly follow the trading advice of others!
Just because someone is having success with their way does not indicate it will work for you.
We’re all in diverse situations, with distinct market perspectives, mental processes, risk tolerance levels, and market experiences.
Create your own individual trading strategy and keep it up to date as you learn from the market.
Creating a Trading Plan and sticking to it are the two most important components of trading discipline.
However, trading discipline is insufficient. Even strict trading discipline is insufficient.
Discipline must be unwavering.
We’ll say it again: rock solid.
As in a brick wall.
And the most significant attribute of great traders is a rock-solid trading discipline.
A trade plan specifies what should be done, why, when, and how. It discusses your trading personality, personal expectations, risk management guidelines, and trading system(s).
A trading plan, when executed, can assist limit trading blunders and decrease losses.
“If you fail to plan, you’ve already planned to fail,” after all.
A trading plan eliminates rash decisions made in the heat of the moment. When money is at stake, your emotions might dominate you, prompting you to make irrational decisions. That is something you do not want to happen.
The best approach to avoid it is to reduce thinking by having a plan in place for every possible market activity.
Every step is written out in the correct trading plan, so you don’t have to make reckless decisions in the heat of the moment.
Simply stick to your trading plan.
The Difference Between a Trading Plan and a Trading System
Before we proceed, we must rapidly distinguish between a trading plan and a trading system.
- A trading system outlines how you want to enter and exit transactions.
- A trading system is a component of your trading strategy, but it is only one of several significant components, such as analysis, executions, risk management, and so on.
Because market circumstances are constantly changing, a skilled trader would typically employ two or more trading systems in his or her trading strategy.
Trading systems will be discussed in greater depth later in the session, but we believed it was vital to distinguish between the two right away to avoid any confusion.
