How Your Trading Plan Fits The Bigger Picture

So how do I write my Trading Plan to fit neatly into my Business Plan, that is a very detailed map toward my very own personal SMART Goal?

Easy for you to say… Next, you’ll be asking me to write it out for you. Doesn’t work like that I’m afraid…

The Trading Plan is the most important step of your trading career, and if you really asked that question above and you have found yourself here at this Blog. Congratulations, you are well ahead of the pack. And I now expect great things from you.

Pieces of the Same Puzzle

You by now, should be starting to understand that what I am giving you, are Puzzle Pieces. That are an important individual part to you becoming a successful trader. And they are IMPORTANT, without any one piece of the puzzle your Big Picture is incomplete, it will not be clear or concise. You will not be able to see your way forward.

It is by putting all the pieces together that you are able to see clearly the way forward and that it is surprisingly simple to achieve. Again, our downfall is our continued need for instant gratification. We don’t want to sit down and plan. “It’s boring” or “I will do it when I find a strategy or system I like”.

Oops…

Can you see how that won’t work … EVER!

It’s like saying “I will buy proper running shoes when I win an Olympic gold medal”???!!!

Or “I will by a race car when I win a grand prix or an Indie 500 race” … Stupid right?

I kept saying it myself not just for months but for years. It’s not hard to guess what happened in those years, I kept searching for the system or strategy I liked. Losing money all the time and getting greyer by the day. Never finding one though, funny that.

Then Boom! I had an Epiphany. Lets, maybe try what my guru keeps telling me. I wrote out my SMART Goal. I reverse engineered it to give me my goals in all the areas of my life. Then I wrote out my Trading Plan to fit nicely into my Business Plan (Wealth Goal). And then as if by Magic I started to get consistent results, which then gave me the confidence to design my own strategy that fits me. Which I back and forward tested and I now trade. Now I Like My Strategy.

Your own strategy

It can’t happen, you will never find a strategy or system you like until you build it yourself or you tweak an existing one to suit you. You will also never find a Trading Strategy or Trading System you like until you have mastered the discipline of trading the easiest of strategies mistake free. Until you create your own trading plan and trading journal you will never find a strategy or system you like. I could keep adding to this list for hours possibly even days in fact. 

Your Map

If you’ve been following along to my Blogs. By now you will have your SMART Goal, your driver the picture in your head that will keep you taking at least one step a day in the right direction. Towards your goal. 

And you will have also reverse engineered that goal giving you your maps in each area of your life. One of which will be your Wealth. This then should have given you, your very own Business Plan.

Remember in order to be a Successful Trader you must treat trading as a business, therefore you need a business plan. This is your wealth map. This will tell you how you are going to get from where you are now to where you want to be.This stops you getting confused when you get to a busy junction in your life.

Those of you that want to achieve the quickest and greatest success in Trading the markets. Will have enrolling to become an Elite Trader with Special FX Academy as your number one priority. As we have the coaches and mentors to push you forward to great things in both your Trading and trading Psychology…

Your Plan

Now you need a Trading Plan that fits neatly into the pocket of your business plan. This plan should also be very detailed, to make it easier to achieve your trading goals.

You’re going to think I’m a mind reader but you probably have something like this on your mind right now “How am I going to write a detailed Trading Plan when I never found time to write any sort of Plan.” Please change time for any other procrastination you are having to stop you writing any sort of Trading Plan.

Admittedly the idea seems harder for you to write, but it is necessary. Keep in mind that it doesn’t have to be the polished article the first time you write it. It just wants to workable for now. You will tweak it and renew it for the rest of your trading days. Consider it a part of you and as you grow so does your trading plan. You will grow as a trader which ever path you take, it’s what we do. And how we start is never how we finish.

The Trading Plan is your fail safe, when all else around you is going crazy. When your Trading Plan is properly written you never have to make a decision in the market again. That is the whole point of a trading plan. You never have to make a decision when under pressure. All the decisions have been previously made. It fits into your bigger picture and you know if you follow it to the letter you will achieve your trading goals.

It takes the Emotion out of Trading.

The Details

If your trading plan states that you can only Trade a currency twice at a time. Meaning that if you are in EURUSD and GBPUSD you cannot place a trade on any other USD pair. So, it doesn’t matter how good that AUSUSD looks or how it feels. Your Trading Plan says no dice. You cannot place the trade. It’s there in Black and White, written in your rules.

And why is it in your rules?

Because you have tested it out. Whatever the rule is. It will have been tested to give you the better results. This will in turn give you the confidence to trust your rules and stick by them. You know that if you follow your rules they will produce for consistent profits over the course of the year. You will easily be able to follow your, with no emotion. Regardless of what happens to the AUSUSD trade you couldn’t take.

If your rules state that you only place trades from the 4hr chart, then that’s what you do. You don’t care what the entry looks like on the 1hr chart, you don’t even know what it looks like on the 1hr chart. Why? Because you follow your rules. Why look at the 1hr chart when you only trade off the 4hr chart. So you don’t see whatever is happening on the 1hr chart. Which then means you don’t feel like you’re missing out (Fear Emotion). If you don’t see it, you can’t have the emotion.

Is this starting to make sense, do you see the importance of a trading plan? Can you see why it is so very important to your psychology?

You will be able to resist placing any trade that is not within your rules. Because before you wrote them you tested them. So you trust them to give you the results you need to accomplish your Trading goals, because that is what you designed them to do.

Clearly Written Rules

By writing your trading rules very clearly, very precisely and having tested them robustly with your own blood sweat and tears (in my case) or with a testing app if you’re clever or in any way geek minded (and that’s a complimentary geek). You know that over the course of a year you will have consistent profits if you follow your rules.

You may even have different rules for different currency pairs, we know they don’t act the same. So why would we believe that one strategy would work for all the different currency pairs. Some pairs respect Trend Lines and others the moving averages. We can only know this by Journalling your trades. Your Journal is a part of your Trading Plan.

Your Trading rules should include you use of lack of use for Take Profit Limit Order. It will definitely include your rules for your Stop Loss as this may be your only form of exit. Do you trail in pips? Do you trail swings? Or do you just move to break even and use a Take Profit.

What time frame do you use for direction? Which time frame do you enter on? And the time frames for precise observation and bird’s eye view observation? These are all rules that will be included in your very own Trading Plan.

Detailed Strategies

What indicators do you use? Do you have different indicators for entry and exit? Are they for direction only. Or maybe you use them as support and resistance. Do you use oscillators? Are they for entry, exit or both?

Are you getting the idea of how detailed you are meant to be. This trading plan should cover every eventuality. Once it is properly written, you will never need to make a decision in the market again. You just look to your rules. That is the point of your trading plan.

When you don’t follow your rules, or even worse. When you have no rules Then you will be getting more of the same results you have been getting…

Didn’t Albert Einstein say that “The definition of insanity is doing the same thing over and over again but expecting different results each time”

Listen to Albert. Take a day or two away from Trading. And use your time wisely. Set yourself up for success…

Write your clear and detailed Trading Plan, that fits nicely into your business plan which you should already have. Always take at least one step closer to your goal everyday…

And Enjoy it…

It’s meant to be fun…

If you are struggling to learn to trade consistently by yourself, then I would suggest taking a look at our Trading Room. Here you will gain access to two coaches, Andres – Director of Trading and myself Director of Trading Psychology. Where else can you learn and be coached by a Trading coach and a Trading Psychology Coach, while making pips?

To Your Consistently Profitable Trading

Callum

P.S. What did you think of this Lesson? Please share it with us in the comments below!

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Callum McLean

Co-Founder and Trading Psychologist at Special FX Academy

Trading Psychology Coach and Certified NLP Coach. It is my belief that trading is 99% Psychological. And it is by understanding and improving your psychology, that you can be a successful trader. Success is a formula that everyone can and should learn.

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