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Monday, December 03, 2012 9:02:58 AM
What Causes Failure? Part Three of Three
Good Morning All:
Over the years, I have written many articles; hundreds, maybe even thousands if you include partial repeats and every short lesson. Sometimes the lesson is a partial re-write, or a new take, or a new way to explain or organize the information.
While there are many summaries out there on various topics, and while the topics on this lesson may be found somewhere else, I began a three part series two weeks ago answering a very direct question: What causes failure in trading? This has been a no-nonsense, nuts and bolts look at the question, not a philosophical dissertation. Two weeks ago I discussed 'discipline' as the first true reason for failure. Last week I discussed reason number two; the inability to focus. Today I will discuss the third reason, which will end this series. There may be other reasons, but these are the top three. To clarify again, most people actually fail because they do not get an education. However, that is a decision that people consciously make. I want to discuss why the people who really try, can still fail.
What Causes Failure? Part Three of Three
Reason number three is the inability for traders to plan and follow up. This is a fairly broad topic, I agree. However, it has to be in there as one of the top three. Again, these three are not in any particular order. Yes, all of these topics are somewhat interrelated. Many may argue that this one is the most important. But what good is a plan, if you do not have the discipline to follow it in the first place? What good is a plan, if it is so expansive no one can review it accurately to see if it was followed?
When I talk about planning, I am not talking about planning with a small letter 'p'. I am not talking about preparing a watchlist for the day, or checking the earnings schedule. I am talking about planning the a big letter 'P'. I am talking about the Trading Plan. When I talk about a Trading Plan, I mean a very detailed plan or what you are allowed to trade every day, when and how you trade it, how you enter, how you mange, when you can change it, what strategies, and all the money management rules. This is not a 'cut and paste' from TPM or ATS. It is a well-planned version or what YOU are going to do every day, after acquiring all that knowledge from TPM and/or ATS. To make this simple, if you day trade without a trading plan you follow religiously every day, you WILL fail. You 'may' survive as a swing trader, depending on your background. We teach and coach Trading Plans primarily in Our Trading and Dynamic Labs. They are talked about in TPM and ATS and heavily discussed in HSTB also.
The other half of this third reason for failure is the inability to follow up. No Trading Plan is worth anything if it is not followed. Many traders have plans, but they sit in drawers. We teach a variety of methods of follow up that include printing charts, trading logs, and eliminating mistakes. Without these methods, there is little value to a trading plan.
Closing Comments:
This is the end of this three part series. To be sure, the number one reason traders fail is they do not receive a quality education. That is what we do at Pristine, provide the best education in the business. What I wanted to address here is, even after the education, why do some still fail. Lack of discipline, lack of focus, and the failure to create a trading plan and to follow up to make sure those first three are in place. That sums it up. Do you have these three in place? Eliminate these three, and you will have an outstanding chance for success.
Pristine Capital Holdings, Inc.
1-800-340-6477
Counselor@Pristine.com
http://www.Pristine.com
Pristine – A trading style often imitated, But NEVER matched
The Eyes of a Pristine Trained Trader
A free Pristine service published every Monday
Sponsored by http://www.Mastertrader.com
Good Morning All:
Over the years, I have written many articles; hundreds, maybe even thousands if you include partial repeats and every short lesson. Sometimes the lesson is a partial re-write, or a new take, or a new way to explain or organize the information.
While there are many summaries out there on various topics, and while the topics on this lesson may be found somewhere else, I began a three part series two weeks ago answering a very direct question: What causes failure in trading? This has been a no-nonsense, nuts and bolts look at the question, not a philosophical dissertation. Two weeks ago I discussed 'discipline' as the first true reason for failure. Last week I discussed reason number two; the inability to focus. Today I will discuss the third reason, which will end this series. There may be other reasons, but these are the top three. To clarify again, most people actually fail because they do not get an education. However, that is a decision that people consciously make. I want to discuss why the people who really try, can still fail.
What Causes Failure? Part Three of Three
Reason number three is the inability for traders to plan and follow up. This is a fairly broad topic, I agree. However, it has to be in there as one of the top three. Again, these three are not in any particular order. Yes, all of these topics are somewhat interrelated. Many may argue that this one is the most important. But what good is a plan, if you do not have the discipline to follow it in the first place? What good is a plan, if it is so expansive no one can review it accurately to see if it was followed?
When I talk about planning, I am not talking about planning with a small letter 'p'. I am not talking about preparing a watchlist for the day, or checking the earnings schedule. I am talking about planning the a big letter 'P'. I am talking about the Trading Plan. When I talk about a Trading Plan, I mean a very detailed plan or what you are allowed to trade every day, when and how you trade it, how you enter, how you mange, when you can change it, what strategies, and all the money management rules. This is not a 'cut and paste' from TPM or ATS. It is a well-planned version or what YOU are going to do every day, after acquiring all that knowledge from TPM and/or ATS. To make this simple, if you day trade without a trading plan you follow religiously every day, you WILL fail. You 'may' survive as a swing trader, depending on your background. We teach and coach Trading Plans primarily in Our Trading and Dynamic Labs. They are talked about in TPM and ATS and heavily discussed in HSTB also.
The other half of this third reason for failure is the inability to follow up. No Trading Plan is worth anything if it is not followed. Many traders have plans, but they sit in drawers. We teach a variety of methods of follow up that include printing charts, trading logs, and eliminating mistakes. Without these methods, there is little value to a trading plan.
Closing Comments:
This is the end of this three part series. To be sure, the number one reason traders fail is they do not receive a quality education. That is what we do at Pristine, provide the best education in the business. What I wanted to address here is, even after the education, why do some still fail. Lack of discipline, lack of focus, and the failure to create a trading plan and to follow up to make sure those first three are in place. That sums it up. Do you have these three in place? Eliminate these three, and you will have an outstanding chance for success.
Pristine Capital Holdings, Inc.
1-800-340-6477
Counselor@Pristine.com
http://www.Pristine.com
Pristine – A trading style often imitated, But NEVER matched
The Eyes of a Pristine Trained Trader
A free Pristine service published every Monday
Sponsored by http://www.Mastertrader.com
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