Plan For Profit

Plan your trade and trade your plan. A common saying we have all heard. But do you really do it?

Theres 2 parts to this comment:

1st - Plan your trade: I believe the difference between winning and losing traders is a winning trader takes a more professional approach by planning out and really analysing their trades and all possible outcomes whereas the losing trader just pulls the trigger like  they have a machine gun and unlimited supply of bullets (Im pretty sure we have all been guilty of that at one time or another).  Which if you had an endless supply of bullets (cash) I dont think you would be trading. From my own personal experience I tend to find the less trades I take, the longer time there is between my plan for a trade and execution of the trade the higher my win rate and profit tends to be. Of course there are many different styles of trading and personally I prefer to have a high win ratio and good R:R so obviously these setups dont occur everyday which means I generally have time to plan out a trade but I know of guys that would rather trade more often maybe sacrifice a bit of the R:R and are still very profitable. This is where you have to know you personality and what would suits you better.

2nd - Trade your plan: So often we are so focused on entries that when we nail the entry we dont know what to do. We close the trade out too early because we have been stopped out a couple times this week or we get too greedy and hope this trade is the one that runs for 1000 pips and somewhere along the way we get stopped at break even or worse a loss. This is why we should plan up front before we pull the trigger what our method is going to be on how to manage the trade. I use varying methods depending on the type of trade I take but my most common will be either scaling out 1/2 to cover stop or scaling out 1/3 and in both scenarios I generally let it run unless its a counter trend scalp which I would have a hard fixed target. This also is where the discipline comes in because if you truly have planned out your trade which could be a phenomenal plan but suddenly you get 1 hourly bar close in the direction against you which you didnt expect and you suddenly rush to get out (speaking from experience). So once you have a well laid out plan follow it.

So all in all what Ive just discussed is actually quite basic, nothing new to trading and your probably thinking "Man everyone knows this blah blah blah" but I truly ask you:
Are you a profitable trader and if the answer is no are you doing points 1 and 2 above or are you machine gunning away like Arnorld Schwarzenegger in Commando?

J