The Trader's Pendulum: The 10 Habits of Highly Successful Traders

Chapter 5Habit #2: Complete a Trader's Business Plan

In his book Think and Grow Rich, Napoleon Hill said, “Wishing will not bring riches. But desiring riches with a state of mind that becomes an obsession, then planning definite ways and means to acquire riches, and backing those plans with persistence which does not recognize failure, will bring riches” (Hill 1937).

That same wisdom can be applied to trading. Just wishing will not bring success to a trader. To be successful, a trader has to have an obsessive desire for success, have a definite plan with actionable steps to achieve it, and take massive action with persistence that does not recognize failure.

Successful traders know this well. They have a habit of clearly defining the goals for their trading business and setting up a business plan to guide their actions. In this chapter, we will discuss the habit of defining goals. For now, let's take a look at how establishing a trader's plan will help you succeed in your trading.

To begin, we will address a few important questions.

“Why Do I Need a Business Plan?”

Why do you need a business plan? You need one for many reasons, but here are nine good ones:

1. To take the time to thoroughly consider your view, right and wrong, about trading and your trading business.
2. To check your expectations: Are they realistic or mostly idealistic?
3. To clarify the reasons you are in this business. Your strong reasons will carry you through the highs and lows in trading, giving you a better chance ...