The Need for a Trading Plan

For you to trade profitably, you start with your plan. To build your house, you start with your plan. To make a movie, you start with your plan. To create a garden, a car, a book, a computer, in fact anything - you start with your plan. Check out all successful professionals and you find they are all working with detailed plans.



Let’s say you want to build an engine. There are two ways:



1. Study engineering, gather everything on building engines [allow at least five years], or



2. Pay an engineer.

It is exactly the same with trading. You first need to find a good engineer. The fact that you are now reading this means you consider William D. Gann to be a good "engineer" of analyzing and trading stocks, options and commodities. William D. Gann was a great "engineer" of analysis and trading. In fact he was the best. Why - because he left his knowledge behind. $50 million in trading profits helped, too!



Trading Business Plan



At Safety in the Market we assist many new traders get started in the market, and one of the core areas we try to reinforce is the need for a solid trading business plan. There is a lot more to trading than simply picking the winning stocks. Trading involves money management, stock selection, analysis, buying, selling, and personal development.



Two key principles must always be remembered:



• To Trade profitably you need a PLAN

• Trading MUST be run like a business



At the core of any accomplished traders success is a trading plan. This should be set immediately after you have determined your trading goals and expectations, because if you don’t have a complete plan then you’re not really in charge. Similarly if you don’t make your own decisions you are also not really in control.



It can be very seductive to get involved in an investment because you "fear" that you will miss out. If this investment was not part of your plan then you should not get involved. This means that you cannot trade on advice from someone else. It also means you must not take tips!



Trades based upon emotion rather than your plan will quickly eat into your investment capital. If you develop a mechanical approach rather than a system based upon your feelings at the time, then you will have overcome some very important stumbling blocks that have de-railed many traders.

Put quite simply, your plan is your foundation. Without it you have nothing.



To ensure your Safety in the Market, remember:



• The effort you put in to planning now, will be rewarded later

• Take responsibility for your own actions

• Shift your focus away from money – work your plan!

• Remove emotion through reliance on the plan

• Always treat trading as a business!



For more information please visit : http://www.safetyinthemarket.com.au/