Trading Plan

The percentage of traders who fail is a daunting figure. The market has a sadistic sense of humour and traders often fail because they are not up to it. Randomness is a cause, and so is having limited trading experience. Telling the difference between random acts of the market and true lack of skill should hedge against both overconfidence and beating yourself in the head for things that are out of your control.

It's easy to get lost without a map, whether in life or in trading. With a map, at least you know what happened and where you were going even if you miss the mark. A trading plan is a document that details your investing rules and your trading objectives. What is the difference between a trading strategy and a plan? A strategy is part of the comprehensive set of rules of the trading plan. A plan can cover every aspect of your trading life.