“Plan the trade, and trade the plan!” is perhaps the most common advice given to traders. As far as advice goes, it’s well meaning, but unfortunately falls well short of addressing the problem most traders actually face.
Looking at the advice, it has two parts. The first part says you need a plan. No argument there. But the second part, about executing the plan, that’s when the problems arise. Why?
The two parts to the advice, ‘plan the trade’ and the ‘trade the plan’, involve two very different skill sets. Without understanding the different skills required, it’s highly likely that you will continue to regularly veer from your plan.
Here’s the disconnect. Planning the trade depends on your intellect (prefrontal cortex, the area directly behind your forehead) And most of the time, the development of the plan does not occur in the heat of battle.