I’m going to start today’s article with one of my favourite quotes.

‘Failure to plan is a plan to fail.’

There is a powerful truth to that quote which no one can deny.

If you do not have a plan to follow, then you will fail.

It’s as simple as that.

It’s like driving.

You cannot get to a specific destination without first consulting a map or using a satnav…

And you cannot enjoy a specific result if you do not follow a plan.

This is where most people go wrong.

Many people try something new like trading the markets, trade football games or start a business blind.

They don’t have a real idea as to what to do, so they try a few things a few times.

A person starting up as a freelance writer may email one or two people because they know other writers have been successful at getting writing jobs sending out cold calling emails.

But when they get no replies they give up and try something else.

The successful freelance writer who found work sending out cold calling emails would have a plan similar to this:

1. Email 10 people each day for 30 days.
2. Record the names of who I email in a spreadsheet and the responses to my emails.
3. Send follow up email 5 days after the original to those who have not replied.
4. Send 2nd follow up email ten days after the original.
5. Mark those who don’t reply after 3 emails as ‘unlikelys’.
6. Find more people to replace the ‘unlikelys’ and rinse and repeat.

By emailing ten people each day over 30 days and then following up two more times on those who don’t reply will result in the freelance writer finding work and building up a network of friends and clients.

By finding new people to email replacing those who didn’t respond, the writer will grow their network until they are at a point where they no longer need to go looking for work.

The freelance writer would be successful because they had a plan which they followed rigidly. They wrote their own rules.

A person who decides to try their hand at spread betting without a plan will open up an account and start opening up trades on markets and watch in horror as the trade goes against them, but knowing that the market could ‘bounce back’ any minute, they leave trades open only to find that the markets bomb and they lose a ton of money.

A successful trader may have a plan similar to this:

1. Trade only when the market appears it is about to turn and ONLY at that point.
2. Cash out of the trade when you have made a 15% profit.
3. When trade goes against you, cash out when the loss hits £20. Do NOT keep the trade open. Move onto another market.
4. Do not re-enter a market until it is at the point of turn. No dipping in to follow the ride.
5. Protect your money. Do NOT take any unnecessary risks.

This is not a real trading plan by the way, it is just an example, but seasoned traders are disciplined and follow a rigid set of rules they write for themselves.

Following a set of rules is the difference between success and crashing and burning spectacularly.

Plans really help at the beginning. They keep you focused and disciplined.

They allow you to learn and build confidence as you go by reducing the risk of failure.

They prevent a lot of wasted time and effort too.

Eventually as you begin to understand better the things you are doing, you can alter your rules to match your improved abilities.

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