Whether you are new to currency trading or a seasoned trader, you can always improve your trading skills. It is possible to trade profitably on the forex market, but the odds are against you, even more so if you don't prepare and plan your trades. The most successful traders trade with a plan, and may even have several plans that work together. A plan helps you maintain discipline as a trader. It should help you trade consistently, manage your emotions, and even help to improve your trading strategy.
Having a pre-defined forex trading plan is a necessary component to treating your forex trading like an actual business and drastically improving your trading success. Any profitable business has a business model or plan that the business was built around and continues to function off of. The reason businesses have pre-defined plans is because they must know how to properly react to all possible situations that might arise in order to create and maintain consistency within the company.
Similarly, in a forex trading business, you must pre-define all aspects of your forex trading if you wish to develop consistency and profitability in your forex trading. It is possibly even more important in forex trading than in other businesses to pre-define all aspects of your interaction with the markets because this is the only way you can guarantee that you don’t fall victim to emotion-based trading mistakes like over-trading and over-leveraging.
In trading, if you don’t set out a plan for your trades and develop strategies to follow you have no way to measure your success. The vast majority of people do not trade with a plan, so it is not a mystery why they lose money. Trading with a plan is comparable to building a business. We are never going to be able to beat the market. In general, it is not about winning or losing, it is about being profitable overall.
A successful trader is one who first develops the skill to make the shot consistently so that at every possible opportunity, the ball is likely to go through the basket. One must trade consistently following a specific trading plan on each and every single trade. With discipline comes profitability. Don’t let unjustified wins interfere with your ability to maintain discipline. Follow your trading plan, and cement in the mindset that if you follow your plan, you will end up more profitable in the long run.