Planning your trades has an immediate effect on your trading: Most of the stupid trades vanish. They fade out of your trading. You many miss a lot of trades in the beginning, as your trade planning skills are not yet fully developed. However, missing a trade is a lot better that taking losses.
Trade plans are like setting traps a few candles in front of price. Forex is all about setting traps.
Returning to the strategies in the Art of War, you learn that it’s not ideal to attack a fortification or to corner your enemy. Even if you are eventually victorious, the victory is likely to come at a high cost. Not all victories are honorable. In trading, you can make bad trades and still make money. In the long run, your luck may run out.
As a trade strategist, you should focus on setting a trap for price. To take full control of your trading:
• Make price come to you.
• Take the high ground.
• Build your fortifications.
• Wait for the enemy to approach you.
• Retreat as soon as you lose your advantage, regardless if it’s for victory or defeat.
If you meet your enemy on a level playing field, walk away and live to fight another day when you have the upper had. No one said war was fair.
Repeat after me:
“I am not a forex trader.” “Only brokers make money from trading.” “I am a forex profiteer.” “I make money by profiting.”
Do not start the day by opening your charts and looking for a trade. Do your technical analysis ...