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Interesting to note that one of the more important aspects to becoming a successful trader is rarely discussed on any forum. Not sure why that is.
The Trading Plan.
Would you start a business without a business plan? Do you think that business would be successful without a business plan? Is trading not a Business? I have followed the same Trading Plan to the letter for over a year. And now I trade successfully. My trading plan is etched in memory and on the rare occasion I have deviated from the plan I have been screwed.
And I think the plan should include much more than just your trading strategy, charts and indicators. It should include an objective, how much risk and reward you seek (and all the rest of Money Management), a daily loss limit, when to take an emotional time out, when to go back to the Sim, how much time you can spend, and when etc.
I include the details of my strategies, naive though they may be. Whenever I find myself flailing about I stop, open up my plan, and try to pick myself up by the bootstraps.
I change my plan frequently, to reflect new ideas, and to correct my mistakes - which are frequent.
I'm not a successful trader yet, and may never be, but I have a chance at success the nailif I follow my plan.
I find that most traders don't have a "risk management plan" to even address the basic principles of risk management.
How many traders:
Trade with no protective backstop maintained on the server side?
Reduce the effects of connection losses via redundant systems (internet connection, vps, backup computer, etc)?
Have a 19th century backup plan (i.e. have the trade desk on speed dial and the numbers written down and easily accessible no matter what?
This all ties into the "execution" phase of your trading.
There's alsoa "maintenance" and "tracking" portion of your trading....once you've perfected your plan, how will you monitor your performance once you're trading? What will be your cease and reassess criteria?
Just like having a plan when entering a trade is crucial, having a plan when going from simulation to live is just as important.
"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
