What I learned when my trading plan wasn't working
When I started trading, I believed that all I needed to be successful was a set of technical rules. I wrote a basic trading plan, without going into too much detail, and thought that everything would work out fine. However, I quickly realized that not sticking to my plan was more common than I thought. I traded impulsively, changed rules on the fly, and got carried away by the excitement of the moment. I couldn't understand why I wasn't getting results
It was then that I realized that a trading plan is not just a list of rules: it's a structured guide, a routine that I must follow to the letter. For it to work, it must be aligned with my psychology, my limitations, and my lifestyle.
Step 1: Define my clear and achievable goals
Set measurable and realistic goals
One of the biggest mistakes I made in the beginning was setting unrealistic goals. I would say things like “I want to earn 30% monthly” without really understanding what that entailed. Now I make sure my goals are specific and achievable. Instead of focusing solely on profits, I set goals such as “make at least 10 trades this week” or “maintain my 2:1 risk/reward ratio on every trade.”
Dividing my goals into long-term and short-term
Breaking down annual or monthly goals into weekly objectives has helped me stay focused. When you achieve smaller goals, it gives you a constant sense of accomplishment, which increases motivation.
Step 2: Set clear rules and follow them without exception
Creating rules for every aspect of my trading
My trading plan now includes detailed rules: when to enter, when to exit, how many lots to trade, how much loss is acceptable. Having clear and specific rules makes my trading consistent. For example, I know exactly how to react when the market moves against my position and what to do if the trade goes wrong. The “if this, then that” rules allow me to make decisions without hesitation.
Don't allow emotional exceptions
One of the biggest difficulties was being flexible with my rules when the market didn't behave as I expected. Now I have the discipline not to change my criteria in the middle of a trade, even when fear or greed urge me to do so. If the plan says “exit at 50 pips,” I follow it, no matter what I think at the time.
Step 3: Incorporate risk management as part of the plan
Set a risk percentage per trade
One of the most important pillars of my plan is risk management. Before trading, I calculate how much I am willing to lose on each trade. I don't risk more than 1% of my capital on a single trade, and I always use stop-losses. This ensures that even if a series of trades does not go well, I will not run out of capital.
Define the risk/reward ratio
I set a minimum risk/reward ratio of 1:2 on each trade. This means that if I am willing to risk $100, I aim to earn at least $200. This rule helps me assess whether the trade is valid and whether it is worth entering based on the profit potential.
Step 4: Create a daily routine and stick to it
Preparation before trading
Before each trading session, I make sure to review the markets, economic news, and my list of assets I want to trade. I don't enter the market without prior preparation: I know what to look for, what to expect, and what to avoid. This allows me to stay focused and avoid impulsive decisions.
Review and reflect at the end of the day
At the end of each trading day, I take time to review what I did well and what I could have done better. This allows me to learn from my mistakes and improve in the future. I also write down in my journal how I felt during the trades to make sure my decisions weren't influenced by negative emotions.
Step 5: Maintain discipline and consistency
Control emotions and the temptation to change the plan
The hardest part of trading isn't the strategy, but maintaining discipline. During losing streaks, it is tempting to change the rules to “win back what I lost.” I have learned to stay the course. If my plan says I should stop after two losing trades, I do so. Consistency is key, and I must not let desperation dictate my decisions.
Evaluate and adjust the plan when necessary
Although I follow my plan strictly, I also evaluate its effectiveness periodically. If a rule isn't working as it should, I make adjustments. Flexibility within a structure is important in order to adapt to market changes or new learnings. However, any changes must be based on logical evaluation, not emotions.
Conclusion
Creating a trading plan that really works is no easy task, but it is the foundation of my success as a trader. Defining my goals, setting clear rules, managing risk properly, and maintaining discipline are the pillars that have allowed me to trade consistently. It's not about being perfect, but about being consistent and learning from every trade.
If you don't have a trading plan yet, start today. Keep it simple, but solid. As you progress, refine and adjust your plan. But remember: a plan without discipline is worthless. The key to success in trading is consistency, not perfection.
