We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.
BOOK YOUR FREE STRATEGY SESSION NOW >>How important is a solid plan for your trading journey? Trust us—it’s absolutely critical, even more than you might think.
Trading is no walk in the park. It’s a path full of surprises, sharp turns, and frequent adjustments.
Think about the endless questions traders face: How do I effectively manage my positions? What are my realistic goals? How should I allocate capital across strategies?
The answer to navigating these complexities lies in one essential tool: planning.
Why does planning matter so much? It’s simple: as humans, we’re driven by emotions. They can inspire us but also lead us to impulsive, rushed decisions. And the worst plan of all is the one you slap together at the last minute.
In this session, you’ll discover:
•The psychological reasons why traders fail to follow a plan, even when they know it’s critical.
•A real-life, costly example of what can go wrong when planning is ignored.
•Actionable tips to create a plan and stick to it with focus and intention.
Let’s dive in! 😉
The Importance of Having a Plan in Trading
The importance of having a plan.
In this video, we will explore the importance of having a plan and why it is essential when it comes to trading.
Whether you are using systematic trading, discretionary trading, or any other approach, having a road map to follow every day in a field full of surprises and uncertainties is extremely important.
What is Meant by an Operational Plan
But first, let's clarify what we specifically mean by trading plan. As you know, traders face countless decisions every day.
Starting with entries and exits, for example. Depending on the goals of the strategy and the edges we want to exploit in a specific market, we can adopt different types of entries and exits.
Let's take this chart as an example, which shows the average weekly return of the gold futures market.
As you can see this market shows a recurring pattern. It tends to rise during the last session of the week and decline during the first session of the week. Based on this information I can already decide to develop a strategy and build a plan for entries and exits.
For instance, buying during the last session of the week and selling during the first session of the next week.
Traders Face Numerous Decisions
However, as mentioned earlier, the decisions a trader needs to make don't stop there. At this point, it's essential to define how to manage the positions effectively. Should you use a stop loss or a take profit? If so, by how much?
There are strategies where using a tighter stop loss compared to the take profit and achieving the favorable risk-reward ratio can be a good choice.
How Much Capital to Allocate to Each Strategy
Other times, however, another important consideration that falls under the plan is, for example, how much capital to allocate to each strategy.
It might happen that you become overly exposed to a specific market or to a single strategy. In such cases, the risk is that the strategy will no longer perform as it did in the past for one reason or another.
The Importance of a Quantitative Approach
So, should you stop trading that strategy? If so, when? As you can see, there are many questions that need answers. Typically, we use a quantitative approach to find these answers.
Now, let's get to the main topic of this video. When we understand what a trading plan is and we have seen a range of questions, let's try to understand why a trading plan is so important.
Let’s Look at an Example
Let's start with an example. Imagine I opened a short position on the S&P 500. Why? Because, without a plan, I woke up thinking that the stock market would collapse, and I decided to act on impulse.
I didn't even set a protective stop, thinking that I will manage the position as time goes by. I will check it occasionally. But that day, instead of a bearish trend, I witnessed one of the most positive days for the S&P 500 in recent years.
My position started to lose value, accumulated 100 or even 1,000 dollars in losses.
At that point, I realized that I should probably close it, but I didn't know when. And I began making a series of poor decisions.
For example, I thought maybe I should wait a little longer because the price might reverse soon. But no, it didn't. I ended up with a loss that perhaps doubled.
Overwhelmed by the pain of seeing such a negative figure, I decide to end the suffering and close the position, wasting months of hard work. The truth is that the emotional impact of trading is underestimated.
How to Eliminate the Emotional Impact in Trading
Trading itself involves us emotionally because we are risking our capital, but this effect is amplified significantly when we have open positions without a clear plan.
The only way to not entirely eliminate but at least reduce the emotional impact is to know in advance how to act. Whether things go as planned or, more importantly, if they don't go as expected.
Often, we do what I call the last-minute plan. We think I'm not worried. I will deal with it when I get to that situation. And so, we end up saying, where should I set the stop loss? Well, as long as the position doesn't lose money, I won't worry about it. But as you have seen from the previous example, this is definitely not a good move.
Why It’s Hard to Stick to a Plan
So, we have seen what a trading plan is and why it's so important, but there is another equally important aspect that is usually overlooked.
Most people, even knowing what actions to take, struggle to follow through and stick to the plan.
I would like to introduce you to some strategies and solutions to address these issues. But first, let's understand why, despite the best intentions, we fail to stick to the plan.
One of the main reasons is that we often don't feel completely confident in what we are doing. A lack of confidence, even partial, can lead us to doubt our choices, especially under pressure.
Every Trader Has Their Own Style
We can all agree that there are multiple trading methodologies and that every trader has his own personality and trading style.
This makes it even more important to find a plan that not only works, but also aligns with who we are and what we think. It's perfectly normal for me to have a different risk profile than other traders, to prefer trading in specific markets or, in systematic trading, to feel comfortable rotating strategies once a month, while others might prefer to maintain a static portfolio.
And as you can see, because there are so many variables, what would happen if we all use the exact same trading plan? In delicate moments, those who don't feel fully confident on the plan will deviate and change things.
And as we have seen before, in those phases, we are unfortunately less clear-headed, which makes it even harder to make the best decisions.
A Well-Structured Plan Can Be Our Compass
In conclusion, we have seen how important a trading plan is. It's not just about strategies and techniques, but also about discipline.
In a field where our ability to make rational decisions is constantly tested, a well-structured plan can become our compass.
The Unger Method
That said, I would like to remind you that in the description below you can find the link to order the Unger Method for free.
A book where Andrea Unger shares his journey as a trader and how he achieved the milestones that we all know, also thanks to a well-structured plan.
See you in the next video.
We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.
BOOK YOUR FREE STRATEGY SESSION NOW >>Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.
I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems.
In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.
Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.
Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.
