To be successful, every trader needs an effective trading plan. Many of the principles behind profitable trading is simple. Yet time and time again, people tend to complicate the decision-making process due to a number of factors, both internal and external.
1. The majority of these traders have unrealistically high expectations of the amount of money they can expect to receive from their investments.
2. Best plans are simple and comprehensive, addressing external factors such as risk control, entry and exit, technical and fundamental analysis, trend spotting, and trading tactics.
Risk control is the foundation of survival for all traders. It is one of the few aspects of the marketplace that a trader has control over. Traders must be comfortable with the worst-case scenario before they ever pick up a trade.