Trade Planning: Learning Through Consistency and Discipline

I’m going to do a series of posts focused on trade planning, aiming to learn about consistency and discipline through practice. In this exercise, I will consistently plan, execute the planned trades, and document a total of 30 trades.

A trade plan is an essential tool for any trader. It consists of a method, trade management, position sizing, documentation, and review. The plan should clearly state, ahead of time, the specifics of each trade: where to enter, where to place the stop, how the trade will be managed, where to exit, and how to size the position. This level of accountability and responsibility offers a stark contrast to our usual approach, which often relies on ineffective emotional impulses for making trade decisions. It enables us to make informed choices instead.

In future posts, I will delve deeper into each aspect of the trading plan, discussing its importance and how to effectively implement it. However, it’s important to note that this exercise is not about the method, a setup, picking the right stocks, being right, winning, losing, or predicting markets. The focus here is not on the outcomes of the trades. It doesn’t matter if all the trades result in losses. The purpose is to learn about consistency and discipline through your own personal insight.

It’s through discipline and consistency that we begin to rewire old, ineffective habits and develop an effective mindset for trading in the markets. Consistently following a plan also provides a baseline that allows for meaningful comparison and learning. There is often resistance to this kind of structured approach. If you’re interested in adopting these guidelines, I encourage you to step into it as much as you’re ready for and make it your own.

This series is not meant for you to follow my trades or worry about my method or setup. It’s not important – my setups lose most of the time anyway. Use your own method; there are plenty out there. Focus on making it as simple and objective as possible. I also suggest starting out with simulation trading or using a very small size.