One of the biggest mistakes we see with traders and investors is this: They have no game plan.
This is one of the most important elements in trading and you should not be trading without one. When you have a game plan, it allows you to get in and out of the market in a non-emotional way. So often we see traders jump into markets based on emotion, investment show ideas, or rumors. This is the worst possible way to trade and the quickest way to lose money.
There's nothing more important to have than a game plan to enter and exit positions in the markets. By creating a game plan, you are setting yourself up emotionally to handle anything that happens in the market. Having a successful game plan, complete with an exit and money management strategy is enormously important.
With the kind of volatility that we are seeing in the markets today, not having a game plan is like financial suicide and that is something that you don't want to do.
Creating a game plan is very easy and you can do in a matter of minutes.
Here are the 5 KEY STEPS:
STEP 1: Write down your reasons for buying or selling a particular market.
STEP 2: Write down your entry points for the market you're about to trade.
STEP 3: Write down when you are going to exit this market. This can be with a stop or when a market reaches a predetermined target zone.
STEP 4: Do not make market decisions during trading hours.
STEP 5: Review your game plan every day to see whether things are going according to what you expect. This allows you to adjust your money management stops and your target zones in a non-emotional way.
That's it. It couldn’t be any easier and the only cost is time and a sheet of paper.
Excerpt From: Adam Hewison. “5 Professional Trading Rules That Will Make You Successful In Any Market!” INO.com, 2012. iBooks. This book is a Free Download on an iPad or any Mac running OS Mavericks.
No iPad? No worries, I have a PDF version for you.
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