Do you have a business plan for your trading? Many small traders believe they don't need one or don't want to spend the time creating one. I disagree. A business plan forces you to think about where you want to go—what you want to achieve—with your trading. You can set monthly or quarterly goals for your trading, instead of just winging it. This results in a way to evaluate your performance each month. It also lets you decide on the best methodology to use in your trading. A plan lets you decide how much capital you're going to use to fund your accounts. It lets you decide on the best markets to trade given your goals. A business plan structures your thinking, letting you make decisions about a daily routine and the environment you need to be successful. You can figure out how you'll eliminate distractions and what data you need to make decisions. This results in stronger discipline.
Each year I look at my plan and adjust it based on my experience in the prior year. Over the next couple of weeks, I'll be posting some of the components of my plan.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.