Successful Trading and Investing Require a Plan

In the world of trading and investing, there are a few steady winners and a lot of losers. It is the insiders and professional traders that make consistent profits at the expense of everyone else. The insiders and professionals trade with a specific plan based on the emotional trading of the majority. The key to long term success in investing or trading is to strive to become a professional. This is not rocket science, it is the science of emotions at work. In just about any investing arena, you see the same consistency of success. It is never about the markets. The results are always the responsibility of the willing participant.

All the various markets treat individual players in the same ways. Forces push and pull at the emotional fabric of each trader from moment to moment. Those forces are often created by the institutions and insiders with this purpose in mind. Once the emotional wave gains momentum, this often establishes the longer term trends. As moments turn into hours, then days, then weeks or even months and years, the trend spins its emotional magic. Take a look at any type of price chart, from minutes to months, and there will always be a trend. There are only three possibilities: up, down, or sideways. The collected professional exacts profits from out of control emotions of the amateur in all three environments. Those profits come courtesy of those who are impatient and unprepared. 

Be it stocks, bonds, options, commodities, currencies, futures, mutual funds, or ETF's, there are two major consistencies in these markets. The professional who uses a specific plan from trade to trade, and everybody else riding the tidal wave of trading emotions without any plans. The investing community breakdown is simply this: 

A) 5-10% are professionals. They are consistent and plan in order to survive long term. Most do. 

B) 10-20% are fringe players. Profitable sometimes, striving to become part of group A. Most fail. 

C) 70-80% are emotional wave surfers. No trading plans, no controls, no clue.