The Trader's Pendulum: The 10 Habits of Highly Successful Traders

Chapter 10Habit #7: Plan the Trade and Trade the Plan

I heard the following story from a motivational speaker:

When John was young, he had a mentor who guided him on life development, career advancement, and the art of getting rich. One day, the mentor asked him, “I know you are aiming to become rich and successful in life. May I see your plan for this?”

John told him he did not have a plan for the time being. The mentor asked him, “What do you mean by, you don't have a plan now? Did you leave it in your car, your house, your office, or somewhere else?”

John clarified he had not come out with a plan yet. In defense, he said, “When I have more money, I will have a plan.”

This was followed by a brief period of awkward silence. The mentor looked straight into John's eyes, and said to him, “Young man, I assure you, when you have a plan, you will have more money.”

Some of my students say the same things as John did. Many of them who are beginners tell me they never have any trade plans, and they will define trade plans when they know trading better. But my advice to them is, “When you have a trade plan, you will know trading better.”

The Clichéd Wisdom

And many life coaches like to ask their clients the following questions:

“Would you build a house without a blueprint? If not, why would you run your life without a plan?”

I know it sounds clichéd, but the wisdom behind these questions holds true. Transferring it to the trading world, I ask my students this:

“Would you build a house ...