Training beginning e-mini traders is full of surprises.
After about five weeks of general trading instruction, I offhandedly announce
(in the third student mentoring session) that we are going to formulate a
specific e-mini trading plan for each individual. Following this announcement, I
am generally bombarded with a series of puzzled expressions from the bewildered
individual. I have decided that asking beginning traders to formulate a trading
plan causes a wide range of emotions fluctuating from complete bafflement to
outright anger.
"I don't have any idea how to write a trading plan," says
the beginning trader.
"You've been trading for five weeks," I explain, "what are
some of the things that you have learned that are essential to trade
successfully?"
"What do you mean?" says the beginning trader with
increasing frustration.
"Surely you can gather together the things we do every day,
for every trade, in order to identify trades that are consistently successful,"
I say.
"Do you want me to talk about my best setups?"
"No, I want you to look at the bigger picture and how you
quantify the things that are part and parcel of our trading days. You can start
with how you prepare," I begin, thinking I am gaining momentum, "and then
clarify your methodology and post-trade journaling activity... "
"I can't do it... ," The beginning trader often sputters,
shrugging his or her shoulders sheepishly.
It seems I have had this conversation 100 times. I often
wonder why developing a plan and putting the plan to paper is perceived as an
impossible task. I generally wait until the beginning e-mini trader has begun to
grasp the fundamentals of trading and can trade with some consistency before I
initiate a conversation about developing a trading plan. I know that in order to
be a consistently successful e-mini trader that each student has informally
devised techniques to identify specific trade setups, exit strategies, and
decided which e-mini contracts he or she finds most attractive and exciting to
trade. On the other hand, putting these ideas into a logical and coherent set of
personal trading guidelines often seems a hopelessly impossible task to
complete.
Yet, I know that these individuals have already devised and informal
plan in their own mind; they just don't realize it yet.
On the other hand, most experienced e-mini traders have put
to paper a plan that they are able to follow from trade to trade. Without a
plan, it is difficult to trade with any consistency; and consistency is what
trading is all about. Consistency leads to profitability; and ultimately
profitability is what allows us, as traders, to trade day in and day out with
enough success to live a comfortable and prosperous life. I know of very few
e-mini traders who are consistently profitable that do not have a written set of
"personal rules and regulations" they have developed to trade effectively. To be
sure, a beginning trading plan can be something as simple as and individuals
"rules and regulations" for trading; it is highly likely that their trading plan
will evolve into a more comprehensive document as they increase their
understanding of trading.
In summary, I have described the usual reluctance of new
e-mini traders to develop a written trading plan. To be sure, beginning traders
are reluctant to write down their "personal rules and regulations." I have
contrasted the beginning traders reluctance to develop a written trading plan to
the methodology of the consistently profitable trader, who has already developed
his or her trading plan and been carefully written their plan out and revisit
the plan from time to time to assure their own personal compliance with the
trading plan. Trading plans equal consistency; consistency equals profitability.
To be a consistently profitable trader it is the essential to have a written
trading plan.
Real Live Trading Doesn't Lie. Spend 3 days with me, in my
trading room, and see if you are one of the many that can profit from a fresh
and unique view on trading e-mini contracts. Sign up for your free trading
experience by clicking here.
Article Source: http://EzineArticles.com/?expert=David_S._Adams
No comments:
Post a Comment