The main reason for the lack of trading plans is that they can be timeconsuming
and difficult to make. Most people want to get right to trading
and don’t want to spend the time and energy needed to write out a trading
plan, so they ignore it. This is one of the biggest mistakes a person will
make, because the lack of guidance from a main plan will just lead to many,
many more mistakes. Having a plan on paper will help you establish and
keep to concrete rules, while helping you avoid emotional decisions made
when the market is heated up or you are losing. People are irrational and
can become horrible traders when under the gun and losing. If you have set
rules hopefully you will follow them and keep on track. Finally, I want to
say that you should keep reviewing your performance and plan. You can’t
improve unless you learn from mistakes. Reviewing is an important aspect
of trading as you’ll see throughout this articles.
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