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Chapter 29, Part III. Dealing Directly With Trading Plan (Finally!)

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, Mar 20, 2012.

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  1. Administrator

    Administrator Just Administrator :-)

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    Part III. Dealing Directly With Trading Plan (Finally!)
    [​IMG]

    Commander in Pips: Although we are coming very close to the moment of trading plan creation, still you need to answer some questions. If you remember we’ve agreed about this earlier.

    Pipruit: Yes, I’m ready.​

    Commander in Pips: Fine, first is a question about your goals. Remember that we’ve said – your goals should be specific. Depending on your goals we will have to trade differently, particularly with different intensity and risk.

    Pipruit: And what choice do I have?​

    Commander in Pips: Well, almost like in plane. When stewardess comes to you with some food and offer to you, you may ask:

    - “What is it?”

    - “Food”

    - “And what choice do I have?”

    - “To eat or not to eat.”

    But seriously speaking - let me a bit explain to you, since your choice will have significant impact on overall trading plan.



    Let’s define the goals


    Fast rule that always works is explanation “what is a goal?” A goal is a reasonable balance between your wishes and possibilities, and preferably that they match to each other. Want to buy a goat? No, I do not have a wish to do that. May be you want to buy Porsche? Well, I would like but do not have a possibility. Do you get it? They have to match. Other worlds, if you have 10K and want 10K every month – this is some kind of “I want Porsche, but I can’t.”

    Pipruit: Ok, I’ve got it. So, how we can specify this equilibrium more definitely?​


    Commander in Pips: Simple. This is the risk/return riddle. As higher return you want – the greater the risk you have to take. You may risk all of your account in one trade with the highest leverage that you ever can get – this is the ultimate risk with the ultimate potential return. But as we have said that trading is a long-term business, there is another limiter that exists for these kinds of stupid impulses. This limiter is durability of standing in the trading business, consistent profit, discipline and the probability of large numbers.

    Pipruit: What should I do then?​
     
    #1 Administrator, Mar 20, 2012
    Lasted edited by : Mar 23, 2012
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