Is Trading-Psychology Plan Important ?

In trading market vast majority of the traders lose and also many of the traders are extremely successful. Why its happening? And why not all traders are successful? The reason behind these losses are, some traders do not have proper psychological plans before starting to trade. They are not prepared on how and where to enter. They also have no control over the outcome of the decisions they have made.

Hence, we have to know the importance of the trading plan. The plan indicates the important guidelines to the trader. The important indications made by this plan are:

• you can't trade without a plan, this is very important in trading-psychology
• the plan should farther define the components in trading-psychology that can be turned into the trading setups
• the specific trading setups and quantity should match to the trader's personality

In simple words the meaning of trading plan is, a plan that includes a series of steps, that starts where method hangs-up. The main objective of this plan is to take the traders action and give them an honest assessment of the action. A trading plan is a key in making the transition from method to real time. Trading-psychology plan is instrumental in making the transition into trading-psychology and then trading-psychology back to trading method.

Trading method plan:

• Trading plan methodology:
• 5 to 20 traders a day
• makes money in paper

Trader's action:

• didn't trade
• attempts to pick out the winning trades and let the losers go
• learning by watching the market

Psychology:

• create excuse for not trading
• anticipate the negative outcomes
• fear avoidance

Trading plan psychology:

• accept loosing as part of trading
• accept possibility of winning
• implements plan instead of all steps

If you have a great trading plan and method you become a profitable trader. Your plan never works for a long period of time, you need to work hard and develop your plan as per the situation.