Why You Need Your Own Trading Plan
All new traders want to find the holy grail of trading systems which will audomatically make them money trading stocks. They want a checklist of percise rules and they want to be sure that if they follow it they are going to become millionaires, or at least quite their job. However most if not all traders can do a lot better by creating their own trading system based on some of the stock market basics.
There are many different stock traders on the planet. Each one has created a trading strategy that fits their needs. For example one trader may have a system that can lose 4 times in a row, but makes it all up on the fifth trade.
You may not be able to sit around and keep placing losing trade after losing trade in order to hit just a few big jackpots throughout the year. In addition to that one trader may see things just a little differently then you. For instance you may see a stock breaking out of resistance and heading higher and another person may see it bouncing off of resistance and heading lower. This small minor detail can determine whether it gives off a great buy signal or a great sell signal giving you different opinions even if you are trading with the same set of rules.
In addition, you may have a different tolarance for risk then another investor. They may like the huge ups and downs associated with trading stock options. You on the other hand may be more suited to simply buying stocks.
The other reason for creating your own system is that you can learn what it takes. If you just take someone else’s strategy and start trading it you will not have the instincts they have. Things like when a stock simply doesn’t look like it is a good trade and when to just exit out of it can be very important.
In the end it is just better to learn stock market trading for yourself and to create your system then try to trade someone else’s.
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