A significant reason for the downfall of numerous enterprises is their inadequate preparation and organization

To achieve success in both life and business, it is crucial to have a well-thought-out plan for attaining your goals.

The act of trading is not dissimilar to any other form of commerce.

Developing a written business plan for your trading is essential, just as it is for any other type of business.

Failing as a trader can be a daunting experience. It is important to recognize that there are a multitude of factors that can contribute to the downfall of an individual in the trading industry. These factors can include a lack of knowledge or experience, not having a solid strategy, failing to manage risk effectively, or succumbing to emotional decision-making. It is imperative to acknowledge these potential pitfalls and take steps to avoid them in order to increase the likelihood of success in the field of trading.

As we noted in the prior lesson…

It is widely believed that a lack of planning is equivalent to planning for failure.

To put it differently, individuals who do not approach their trading activities with the structure and strategy of a business are destined for failure.

Here are some crucial questions that you should answer to as part of your trading plan

1-What are your specific reasons for wanting to become a trader?

2-What do you hope to gain from trading?

3-What are your biggest strengths?

4-What are your biggest weaknesses?

5-How do you plan to address your weaknesses and leverage your strengths?

6- What are the things that are going to separate you from the large majority of traders who fail? (Answering with “hard work” isn’t enough. Lots of hard-working traders still fail.)

7-Will the things you mentioned above actually give you an edge in the markets so your trading outcomes generate a positive expectancy?

8-What market or markets do you plan to trade and why?

9-How much time can you devote to actively following the FX market? And the overall financial market?

10-What is your trading style? Do you plan to scalp, day trade, swing trade, or position trade?

11-Do the trading style(s) you’ve chosen reflect the reality of the amount of time that you can devote to trading?

12-At what times throughout the day (or week) are you going to spend actually trading, researching trades, and then learning about the market?

13-What trading system(s) will you be using (your criteria for entering and exiting trades)?

14-What is your risk management strategy?

15-How will you know if your trading system or strategy stops working?

16-After you’ve identified that your trading system or strategy has stopped working, what will you do to address it?

17-What trading software and equipment you will use to trade and how much is it?

18-Who will you use to access the markets? What broker(s) will you use?

19-How much money do you plan to start to trade with? Is this money you can afford to lose without negatively affecting your current standard of living?

20-Do you plan to add money to your account and if so where is that money going to come from?

21-If you are profitable, do you plan to reinvest profits or withdraw some or all of them?

To truly commit to the practice of trading, it is important to devote careful consideration to the aforementioned inquiries.

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