If you are a trader or you hope to become one of the bests, you need a plan and it has to be a good one. One of the reasons that people lose money in Forex industry it’s that they don´t have an action – defense plan, and I have to be honest; although brokers don’t teach this kind of things, it´s true that they can´t create a different plan for every single trader, every trader moves ahead at different ways, fear, risk, greed, personality; so their ways to operate are somehow under rules of human factors. I’m not trying to say that´s something bad, however, this can open a sort of possibilities to lose and make huge mistakes.
Usually a trader starts with some small transactions because he wants to earn some money, unfortunately he doesn’t know what it takes to operate Forex, then he learns some indicators and hears to the news to try to do the same with the same motivation: earn some money. After thousands of tries he´s tired and wants to try last time and hopeful buys a robot to make transactions and once more, he fails. This will happen again and again for one reason: this trader doesn’t understand how to operate Forex, he doesn’t know what to do, how and when, or he just knows it but he doesn’t create an action plan to be automatically executed, honestly to this point, he just want to earn money.
Let me show you with an easy example how impractical this looks: I´m in city A and I want to go to City B, there I have a new job awaiting for me, and I’ll earn big money and probably meet some nice people. I know about a great invention that can help me to get there every day: the car. Now, let´s pretend that I don´t know how to drive, but that´s not my problem, I don’t really want to learn how to drive a car right now, the only thing I want now it´s to get to city B.
That´s exactly what happens to the novice trader, he wants to get to city B (earn big money), he doesn’t care how this invention works at all and how this can be his victory, (Forex).
After some time walking, traveling on public bus passing by 3 cities before mine, I understand that the only chance I have to get there is that car, so I get in the car and shout: take me to my destination! Nothing happens. I press buttons and turn the radio on, know how to use the wipers, and how to replace the tires, the only thing I don’t know how to do: make that car works! I feel frustrated. The car is going to work as soon as I follow step by step the procedure to make it work! Finally I decide to follow the steps and the car works, it does, because I did what I had to do, regardless of frame of mine, fear or greed.
Don’t you think this is an action plan? (Step 1: put the key, step 2: make the change, if step 2 doesn’t work, try something else, step 3: the clutch, etc.) This is how trading has to be for you, a vehicle to take you since today until your destination tomorrow, just like the car, there are other things in this life where you need an action plan regardless of your frame of mind, fear or greed. This plan will defend you from yourself and if this is a good one, you can make it work automatically while you work in something else. If right now you can´t describe your own plan, that´s maybe because you don’t have one.
Business Development Manager Tradeview Ltd.