With a trading system you are prepared for every situation you may face in your trading. This ensures you’ll be consistent in your trading no matter what happens. To make sure you cover everything, your system should have:
- Rules for entering, adding to, and getting out of your positions.
- An action plan in case your trading computer, internet connection, broker, power, telephone etc. break down, or fails to be of any real use.
- What you will do if you are unable to trade.
- What you will do if you lose a certain percentage of your account
- What you will do if all the markets are closed and you can’t get out of your current positions.
Unless you have answers for all these scenarios, you stand a good chance of loosing money. With the answers, and discipline you’ll be able to tell if you trading system needs to be tweaked, or if it’s just the markets.
