After racking up a very healthy trading portfolio, many traders get the idea that they are infallible and every trade will come as easy as the last. Don’t be a victim of this mindset. After gaining some experience, nothing should motivate traders more than a trading plan that monitors trading structure, while helping the trader follow through only with quality trades.
To maintain a healthy bottom line, traders must
learn not to give back profits. After racking up a very healthy trading
portfolio, many traders get the idea that they are infallible and every
trade will come as easy as the last. After gaining some experience,
nothing should motivate traders as much as a trading plan that monitors
trading structure, while helping the trader follow through only with
quality trades.Following through with a planTo
avoid a dip in account balance, the active, professional trader knows
that following a trading plan is the ultimate way to succeed. Having
trading discipline is the key to growing your portfolio. While the
market and its variables change minute by minute, trading plans offer
plenty of consistency that any trader can fall back on while keeping
active in the market. Proven techniques and strategies produce profits
consistently by involving traders in only quality trades ? those that
can be won more than they are lost.Quality not quantityOne
of the few suggestions for holding your own while trading is to make
only quality trades and refuse to chase returns. Traders get sucked up
into the idea of trading religiously, whether making good trades or
bad, and start giving back their excellent returns because they stray
away from a plan. Making a large number of irresponsible
trades will not produce any profits; rather, it will slowly drain an
account balance because of the strain that many trades put on an
account. A comprehensive trading plan should include enough room to
make many trades, but limit them to only the most profitable of the
bunch. Why be a 70% trader when you can obtain 90% accuracy?Have some reasoningBehind
every trade should be a motive, whether in the form of technical
analysis in support and resistance lines or fundamental trading ideas
and news releases. A customized plan should include rationale for each
trade, as well as reasons not to trade. For example, your trading plan
might be best for trading opening gaps, rather than trading the stale,
midday market.Know yourselfThe most important
part to any trader is the part that knows yourself. Before trading,
every trader should grow accustomed to their own trading plan and their
own personal goals. Remember, every single trader has a different
market personality, as well as varying risk-to-reward tolerances. Realize
that you cannot enter the market recklessly and expect life-changing
results or financial freedom. These two goals are incompatible, as
trading violently actually limits profits instead of producing them. A
trader just needs to stick to a cohesive, thoughtful trading plan , and
the rest of it will fall in behind. A little common sense and a
conservative approach pay off in the end.
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About the author
Rushing is an active, professional day trader; trading coach; and
author. He is the Founder and CEO of Trading EveryDay, a provider of
educational trading products and services that are available worldwide.
Trading EveryDay has complimentary/FREE products, a Tools of the Trade eBook and a Trading Room Report, that are downloadable for your convenience.
Tags: account balance, bottom line, consistency, discipline, few suggestions, mindset, professional trader, profits, quality trades, variables change
