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Plan the trade, and trade the plan! Common advice that is well meaning but not really that helpful.

It’s not helpful because in the heat of the moment, when your trade approaches the stop loss, or starts to pull back, that plan you created will be dust in the wind.

Or maybe you’ve planned to be more patient and wait for a higher probability entry level as opposed to putting on another impulse trade. But the powerful urge to ‘make something happen’, or ‘get my money back’ takes over, and click, you’re in another impulse trade!

Or the ever popular, ‘no one ever went broke taking a profit’ excuse to prematurely exit a winning trade that is stalling or in a pullback.

The problem with one of the most common aphorisms in trading education, ‘Plan the trade, and trade the plan’ is that this statement involves two very different things merged into one idea.

Planning and executing involve different skills that draw upon different parts of the brain. Not only that, planning and executing typically occur in two different mind-sets.

Planning the trade is largely a function of your intellect, the prefrontal cortex PFC. You create your plan in a relatively calm state of mind with your PFC in charge. 

But when it comes time to execute the plan, other areas of your brain will become involved. When facing the market, your mind is no longer in the same state it was in when you created your plan.  Now, your P&L, your status as a trader, and a host of other factors that swim through your mind, not to mention the subconscious ‘limited beliefs’, and maladaptive coping strategies  and defense mechanisms.

Developing self-awareness and emotional awareness helps you stay on plan. Do you have what it takes to improve?

A 1:1 coaching client I’ve been working with for about 6 weeks and who just closed out his best month ever describes his experience in an email he sent me yesterday:

“…….I also think I am getting much better at engaging with my feelings and I think this is the reason I am able to stick to my trading plan more than I have ever been able to do in the past, and I also think this will have very positive effects on my life outside of trading. I am going into some deep issues and it feels good to get those off of my chest and know that facing them, while sometimes painful, makes me a more resilient trader and person.”

If you want to stick to your trading plan, the first thing to do if you haven’t already done so is to sign up for my free email newsletter that sends you tips every two weeks. If you want to take it further, consider my self-paced Advanced Course that has many exercises and techniques to help you stick to your plan. And if you’re very committed to improving your ability to stay on plan, contact me to discuss 1:1 coaching.