Section 1: Introduction

Trading is like no other working environment, you are your own boss and if you don't take the necessary precautions you can lead yourself to your own failure. One of the most important steps we can take to overcome this possibility is to approach trading as a business, and as with every business we should develop a business plan. 

A well thought out and detailed business plan is an important aspect of trading because it forces us to verbalize our current status, where do we want to go and how we plan to get there. A trading plan helps us identify potential problems and suitable solutions to those problems, the money we want to make and how we plan to make it. A good business plan will plant our feet on the ground and guide us in the right direction. 

If you read or attend any business courses they will also stress the importance of this, trading is no different

It is important to make our business plan once we have developed our system and before starting to trade real money, only this way are we certain that the decisions we take in the future are in our best interests. Otherwise, our decisions are going to be taken under stress and pressure and in these circumstances people tend make irrational decisions. 

Just recently one of our students got back in touch with us for some advice as they were encountering some issues with their trading and were unsure how to approach it. We reminded the student to see if their business plan mentioned this and they recalled that indeed was the case and they were able to resolve their problems. The main reason for this was that the plan was written when they were able to see their path clearly but the view had recently become clouded with emotion. The plan put them back in the right direction and reminded us how important it was.

If it is so important, then why very do few people put together a business plan? 

Because at first, the benefits of a business plan are not evident, they think it is a waste of time since they can be making money by the minute, or they are so eager to trade that they think business planning can be done some time later. Anyway, I don't think that is the question we should focus on, but how many of them achieve consistent profits? I would venture to say -none of them. A Business plan is a road map, it will guide us through our trading adventure. It will help us during any contingency we encounter throughout our trading career. 

This lesson is structured in the following way: 

Section 2: Business Plan: in this section we will outline the most important aspects of a business plan. 

Section 3: Trading Journal: having a journal can help us in several ways, discipline is the most important of them all. 

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