A simple, focused trading plan

What would I say to my younger self about how to trade?

I’d start by explaining how financial trading works.

In essence, financial trading is no different from any other exchange—buy and sell higher or sell and repurchase it at a lower price.

And the concept of opening a ‘short’ position and repurchasing it at a lower price to make a profit would take some convincing.

So, let’s assume I understand anything that is googleable and get down to what matters.

What matters most is the risk—because the risk is under the trader’s control.

I control risk through overtrading awareness, trade size and my take profit and loss plan.

Each element of the above has to be a thoroughly ingrained and practised habit.

As part of the loss plan, I look at it for what it is and let it go—because every trade has its discrete outcome.

Detachment means the outcome of a trade does not define me. It does not mean separation from risk—as that would be foolhardy.

My goal when I trade is to find my alignment with the market.

I take every setup opportunity. However, if I’m not happy with either the market or myself somehow, I reduce my trade size—but I must take the trade.

I grab small definable chunks in repeatable rotations of the market in a timeframe that’s comfortable to me.

I take one or two trades a day—win or lose. But I often go a few days without a setup and, therefore, without an entry.

I’m interested in the statistical probability of something continuing after a specific event.

That event is defined by price action, zones of support and resistance and bar by bar momentum.

I focus on one currency pairing and one market session.

The pairing is the British pound to the Japanese yen (GBP/JPY). And the market session is a couple of hours on either side of the New York open.

Yes, my approach has become significantly more focused recently. I ought to have had this conversation a couple of years back!