Lesson 20 the critical elements to mastering your trading plan Welcome to Lesson 20. My name is Sam ADA. I'm a global macro Currency Trader and the owner of effects renewed calm. This is the advanced forex course for smart traders. Bow Lipschitz market wizard said many people think that trading can be reduced to a few roles. Always do this always do that.
To me trading isn't about always at all. It's about each situation. Without a written plan, emotions almost completely dominate your decisions and experiences when you trade. For instance, when you run into trouble or come across a less obvious decision point, you can be hijacked by fear or greed. You become irrational and make mistakes. The human limbic system as a gatekeeper for all higher thought processing and evaluation, your emotions overshadow and prevent logical thought processes.
Conversely, when you think rationally and trade your plan, you're in the zone, you're freeing yourself from the constraints of your emotions. You're more open, agreeable and compliant. All in all, you're much more likely to make better decisions. If you have ever traded without a plan and started to use mine, you will know the difference. It's like chalk and cheese. Your plan becomes the foundation for consistent and rational action taking in state of reckless emotion driven mistake making.
But not in your plan will do. It needs to be unique and special to you. It needs to be your plan when you own deep down. The Quest is not finding the one approach that unlocks the secrets to market success, but rather finding an approach that It fits your personality. You cannot succeed in the markets by copying someone else's approach. Because the odds are remote, that their method will fit your personality.
You have to know yourself and not try to be somebody you're not. If you are a day trader in day trade, if you are a long term trader, then be a long term trader. If you're a technician, be one. If you're a macro trader be exactly that. Don't get distracted by the number of ideas and strategies that you see opportunities and be cutthroat and pick the ones that suit you. Sometimes this means you have to let go of a promising idea.
Remember, good can be the enemy of great, don't let it stress you knock down your good idea and you can revisit it later if you need to. It's about figuring out what you are the very best at and doing more of those types of trades. If you want to be as successful as possible in the markets, the stands to Isn't that you need to zero in on your winning attributes and exploit them mercilessly. It's the same in business, and even sport, the best of the best know exactly what they're good at, and how to use it to full effect. Focus on the strategies, trading vehicles in time horizons that suit your long term goals, model of the market, and importantly, your day to day schedule. The seduction of day trading.
Day Trading is like the Vegas of trading lots of bright lights and seduction, which only a few seasoned pros can resist well enough to make significant amounts of consistent money from the edge. Now my goal here is not to dissuade you from being a day trader. If you are confident and short about you want to do you're not going to be persuaded by me one way or the other. What I do want to do is stop you from getting stuck down the wrong trading rabbit hole Day Trading requires enormous amounts of time preparation and commitment. This is always going to be beyond the practical reach of many of us. It is a romanticism created by brokers that you can come home in the evening and sit in front of the computer screen trade, and then pop off the bed with a few grands profit.
Yes, some people can do it, and many other full time traders do exist. But these traders are like the professional poker players in Vegas. They are not their own holiday from their full time job. It's what they do day in and day out. Instead, it may be best to master the slower timeframes first. Your age as a retail trader is much greater in swing trading or position trading.
Your costs both in terms of spread and time are considerably less and the slower speeds cuts down the impact of any mistakes on your performance. Don't think that you need to day trade to make big returns. The list can be more carefully consider what you want out of the market. Why you have chosen the method you have and whether it is realistic for you. market was admati Swartz said, I'm extremely well diversified. my thought process is if I screw up in one place, I'll always have a life preserver someplace else.
Have a side income. Much of trading effectively is about stress management. A highly stressed trader makes mistakes and has trouble trading the plan. diverse sources of income allow you to manage your stress levels in the commit more capital to your trading. A wise trader once told me that it does not matter what you do, even if it involves stacking shelves part time. It's just important to make sure you have another source of income if you want to be a trader.
Cash Flow is king is it helps you manage stress. Manage your own account if you can. There's nothing like doing it. The Best way to grow and develop is to live trade, paper trading back testing and trading a demo account all have their uses. But they are very limited since they don't give you the full experience of having skin in the game. trading is about psychology.
And if you neglect this mental component for much worse learn bad habits from practice trading, then these methods of trading can only take you so far. This is another bad rabbit hole that you can also easily get lost and it's by being brave taking the hits and having the courage to trade live that you take those first steps towards mastery. After that it's down to hard work self awareness and learning from what you have done in order to become a winner. keep it balanced life and unhealthy or unbalanced obsession with any activity is not conducive to long term success. If you recall, Van Tharp suggests we are made up of a mess of conflicting parts pizza Your parts has good intentions. But if you don't take steps to satisfy those parts outside of trading, then they will have no other option but to interfere with your trading process.
If you don't satisfy your need for excitement outside the markets, then you may try to satisfy it when you are trading with disastrous consequences. The market is not there for your pleasure. It is therefore important to learn to deal with your personal issues outside the market. In a sense, you can hang them on the metaphorical coat rack when you sit down to trade, and then pick them up again when you finish for the day. You should also schedule vacation time and take breaks during the day. It's acota said I don't judge success, I celebrate it.
I think success has to do with finding and following one's calling regardless of financial gain. Trade in alignment with your purpose. The best traders understand the greater role in the trading economy. They know why they are trading outside of simply making money and are appreciative of the good that they both create in their own lives and others through their trading activities. acknowledgement of your purpose is an important chip to the hubris of success. If you let your wins get to start to think you're bigger than the market, I show invitation for a costly come up and understanding and valuing your purpose keep your ego in check.
On the flip side, being clear about the good you're doing is a critical factor and aligning your subconscious towards wealth. Important toes to have on hand when you trade. When you trade you want to have some resources ready on hand. This will help you eliminate mistakes and keep your trading psychology and ship sharp shape. These include a trading plan template, having written trading principles and having a trading checklist. market was it bill O'Neil said anything is possible with persistence and hard work, it can be done and your own determination to succeed is the most important element.
You have made it to the end of the advanced forex course with smart traders, but your journey is only just beginning. Firstly, I want to say thank you for the considerable time and effort you've put into the course. The combined into the cost of that of a good book with detailed exercises at the end of each chapter. making it to the end is a real achievement to be proud of. I would love to hear any feedback you have regarding the course and how your trading has changed based on what you've learned in the 20 lessons. With your help, I am to make the course the best it can be.
Finally, here are some next steps you can take. Go back to lesson one and rewrite your beliefs about trading. In the first lesson in the course you wrote your beliefs about trading. I would encourage you to revisit the exercise and compare your beliefs about trading With your new beliefs about trading now, this will be a good indication of the transformation you have made. If you want to get more signals and insights about the Forex market, then visit effects renew calm, you can get a free trial of our signal service and I publish my best work each week on the effects for new blog. I suggest you join the fix renew blog, it's free.
If you like what you've read in this course, and you know other traders, why not share it with them to once again thank you for your time and participation.