Are You still Making an Error Trades, even though You have a Trading Plan?

a guy sitting by the computer with the regret on his face, clearly he has no trading plan

It’s been said that pilots make an excellent trader, because they are taught to be exceptionally thorough, and learn to follow a checklist.

I’ll paraphrase  Marty Schwartz, the greatest S&P trader of the  90’s, he once said:

“A great trader is like a great athlete.” “You have to have natural skills, but you have to train yourself how to use them.”

I would say the following:

“A great trader is like a pilot.” You have to have a checklist, and follow it to a tee.”

This is easier said, than done…

The actual reality is, None of us will be disciplined a 100 %.

Neither will anyone else that has a heartbeat.

To deny this fact, is essentially deny the very essence of our nature.

Meaning, we are humans; we tend to make errors.

 

picture of a head that has trading plan

Trading psychology plays a major role in determining whether you are going to succeed in this field, or not. Your mental state, especially an emotional background, will be a true reason separating you from the loosing herd.

You might have a rock-solid trading plan, but certain emotions like fear, greed and regret will affect your decision-making process anyway.

Here is the thought for the brain:

If a strategy alone was the true determinant of success, than most traders would’ve been millionaires.

Photo credit: TZA via Visual hunt / CC BY-NC

So, what is an error trade?

Below is a compact checklist of what I think to be an error trades:

 

  • Missing out on the entry, thus being late to the actual trade

         (This, I account to the analysis-paralysis. Over thinking, and over analyzing the setup.)

  • Moving your predetermined stop order

         (Wishful thinking. Hoping of a market turnaround.)

  • Rushing, or forcing entering the trades too early

         (Fear of missing out on opportunities.)

  • Placing the wrong take profit

         (Not understanding risk-to-reward ratios.)

  • Not following your predetermined risk parameters

        (Lack of discipline and patience.)

  • Not initiating a trade, when your system provides a clear signal

        (Lack of confidence. Not believing in yourself. This happens a lot after the several

         stop-outs.)

 

Back in the days, when I was day-trading, I had my good days and bad days.

After doing my back test, and reviewing one of these bad days I came to a realization.

Even though, I followed my trading plan, but if, and only if,

I have had eliminated my error trades, I’d finish the day in positive.

Be sure to also read: What Are The Qualities Of a Great FOREX Platform…

This what I can suggest, to avoid these situations

Open two accounts, plain and simple!

Shield yourself from the error trades, by creating two accounts.

With the first account you’ll be making disciplined trades; you’ll be following your outlined trading rules to a tee, and tracking any “errors” you make.

With the other one, you can be more lenient with yourself and make all the errors you want as you experiment with new ideas.

This will be compared to a simple dress code scenario. When you are at home, or with your friends, you usually ware casual clothes, right? On the other hand, when you are on a date, not only you want to look good, but also to feel good. You wear the nicest clothes, and deliver your best attitude.

Think of the first account, as being your “dating-account.”

And the second, being the “casual-account.”

You’ll be amazed at what a difference this little trick will make to your trading.

a pretty girl with happy emotion on her face, she definitely has a trading plan

 

Conclusion

Even though you might have a solid trading plan, you still are a human being. You are bound to make mistakes, the “error trades.”

The best option to improve one’s profitability happens to be, not by constantly fine-tuning the parameters of your strategy, but by attempting to remove the errors you are already making.

Start tracking your errors.

 

What Error Trades Have You Made in The Past?

What Do You Think of Our Solution?

Please leave a comment, and let us know.

What Are The Qualities Of a Great FOREX Platform…

Close shot of the electronic forex platform.

Choosing the right Forex platform is a big decision! They are the online software that provides live, streaming, executable offers and bids for instant electronic trading. This is where you actually perform your trades on products such as currencies, stock-CFD (contract for difference), commodities and derivatives.

These platforms (also known as the “forex station”) should include charts and other necessary tools needed for an online forex speculations. Honestly, it is challenging to find the right online trading platform, and you can do this if you are determined to trade the forex successfully.

There are several key factors to consider before you choose one.

One of the interesting things about forex brokers is that most of them offer a free trial for their software, so you are free to open a demo account and simulate the trading without any risk.

So after spending long hours studying Forex investing, you’ve finally decided to take the plunge!

But here comes a little problem… you’re just finding it hard to figure out how to use these platforms.

Online, there are numerous available, but only a few of them offer beginners the comfort for trading. It can be frustrating finding the right platform that works for you, let alone understanding how they work. Finding platform that provides a free demo account and is user-friendly will make a huge difference in the way you view trading.

 

picture of a girl that is baffled by the look of electronic trading

As a newbie, you have a special problem… experience.

So if you are looking for a trusted platform for your trading business, then there are lots and lots of available platforms in the market today. In this article, we will be discussing the properties you need to consider in a good forex platform.

Here we go!

SUPPORTED BY TOP-NOTCH BROKERS

One of the most important properties of a trusted forex platform is that it should be backed up by reputed forex brokers. This makes the platform established on trust and reliability. A platform supported by the major brokers will be able to do the outstanding trading. With such a great backup, a valuable performance will be delivered with a high level of accuracy and speed.

DEMO TRADING

In Forex trading, you will keep learning as you continue working in the process. An excellent platform will provide you with the option of some demo trading. This is necessary because when the time comes to use a platform with a new technique, you’ll not be putting your investment at a greater risk.

GREAT CUSTOMER SUPPORT

A great platform needs to have a well-trained customer support team. They should be available 24/7, providing customers with an incredible service. This team should be capable of solving all of your forex trading related problems.

They also need to have a community where you will be opportune to interact with other users of the forex platform. They must provide this service in the form of online chat rooms or forums, where users can interact and communicate with each other.

Also, see:  Putting some Daily Fx Trading Things in Perspective

Business district at night time

In conclusion,

Despite the fact that the software development of electronic trading platforms  came a long way since the early days, remember to look for a platform that is backed by a reputable broker, provides a free demo account, has a high level of accuracy/speed, and also has a user-friendly graphical interface.

This will help you become better conversant with the system so that it wouldn’t sound like a frightening place.

 

When Choosing a Platform What Else Should We Pay Attention To? 

Share your opinion, and let us know…

 

Show Buttons
Hide Buttons