“You need a plan because it will help you make a logic trading decision. A good trading plan will help you avoid the emotional decisions in the moment of uncertainty. The benefits are an easier trading process – trade according to your predefined conditions, planning in advance will save lots of troubles, cold-blooded decisions – you know how you should react towards certain market movements, so you won’t include emotions in the decision-making process, a strict trading discipline – trading needs learning day by day, discover why some opportunities bring profits and some not, continuous improvements – you will learn from past mistakes and improve your ability to judge market opportunities.

As any other activity, trading needs a plan. You need to create your plan and identify what type of trader you are, which are your weaknesses, so you know where you need the most work done. Successful traders have at least one plan, because they usually implement several plans together. Always write your decisions before executing them. Why? When you see your decisions written, you have the chance to overview and think about them twice. This way you will keep your attention on your decisions and focus on what is a priority. The secret is to write the plan and implement it, do not lose too much time in writing and sleeping over the plan. Write and execute it.

DISADVANTAGES OF TRADING WITHOUT A PLAN
• You may not be capable of controlling your emotions when trades go against you.
• You go after any opportunity because you want to make profits out of each of them.
• Always chasing the market and reacting to any small movement (equal to distraction).
• You will hold wrong trades for a longer time, being afraid of big losses.
• You are mainly focused on how to get profits, and you do not consider how to prevent losses.
• You take a longer time to make a decision, because you do not know what to do.
• You open more trades that you are able to manage, and most of them end up as losses.

How to adapt a trading style to your goals?

The moment you decide what type of trader you are, you should start learning about trading online and doing research about trading methods, analysis, assets and strategies. Make learning a priority, and discover what new methods can you adapt to yourself, so you can maximize your profits. This way your plan is more effective when you create it based on your individual needs and expectations. Once you identify your needs, evaluate the efforts required to meet your needs in the timeframe you want. Time, learning and research should be a continuing investment. Research should reflect the latest global trends and financial events. Ask yourself if you want to be focused on fundamentals or technical methods of trading.