An important element in any successful business is a core plan or step by step series of actions that can be easily executed to achieve success.
The same underlying structure is no different for creating a Forex trading business. In fact some of the benefits from a Business plan can actually be indirect benefits such as:
- Increased Confidence
- Consistent Account Growth
- Avoiding Account Blow-Up
One of the positive side effects of having an easily accomplished business plan is that it indirectly increases your over all confidence in your trading. As a trader it is very important to be confident for many reasons such as, eliminating hesitation, jumping out of trades too early, not taking profit, etc…
By defining exactly what you are going to do on a day to day basis, you can eliminate indecision when your caught in the heat of the moment. The less decisions you have to make as a trader the less emotions can get involved when placing trades. This “un-emotional” state of mind can help you become a better more confident trader that can generate consistent profits.
Consistent Account Growth
Having a Business plan allows you to focus on the day to day activity in your account while maintaining that long term outlook of how you want to build your trading account over time. When focusing on each trade and knowing the different outcomes to expect whether negative or positive on a micro level helps you maintain the equity curve on your account.
Avoiding Account Blowup
If your like most retail traders you have experienced at least 1 heart wrenching account blowup. I know in most beginning days of trying to master this enormous market, things can turn against you fast. We have helped traders that learned this the hard way and I know many others can associate with us on that. So how does one avoid this?
A great business plan requires an exit plan when things go bad. Furthermore, when your trading strategy is not working with what the market is presenting, what do you do?
How many strikes are you allowed to take before you step away from the computer?
All of these questions need to be answered based on your tolerance level, trading style, and what is appropriate for your account.
In our Free Video Trading Series we expose a detailed explanation of some of the money management tactics used in our business plan that our students use on a daily basis.