The Importance of a Plan Welcome to the Top 1%

The first thing I want to say again is that 99% of the traders in this industry NEVER trade with a good plan. This is a big problem, since the way we make decisions in ordinary life will not work for Forex trading. So I want you to know that when you complete your first

plan, and take your first trade, you are going to leap frog ahead of 99% of the traders in the world.

People ask, Vance, how do you know it is 99%? You’ll see. Trading with a plan is VERY different. So different, it immediately changes the way you talk about Forex trading.

You are going to be developing the skill to execute and making adjustments to your plan as you gain experience and review.

But your first job is to execute. Don’t concern yourself with anything you don’t understand. Just execute. And don’t be hard on yourself. If you only execute 50% correctly in your first series, this is normal. Our mistakes show us where we have work to do.

The Importance of Your Words

I could write a small book just on this subject. But I want to impress on you why it is very

important for you to write your own plan. In the introduction, I told you that I asked

traders questions to develop their plan. I did this because I discovered that we don’t understand each other as well as we think (assume). When I first tested the Forex Art of War learning system in 2010, I gave the traders a plan. In time, I was baffled for a couple of days after something happened. I taught them the setups and gave them the plans. They then took 20 trades. When we reviewed the trades, every single trader got around 50% correct. In other words, they broke a rule in their trading plan about half of the time.

This happened over and over. I soon decided that what I was taught them, and what they heard me say were two different things. So in the second generation of this learning system we did it differently. I gave them the logic, they traded, and when they got it right, then we defined their trading plan. In this way, each trader trades what they see, and has a plan written in their own words, avoiding the problem with teaching assumptions.

Notice how the problem was eliminated. Instead of trying to make sure that everyone

understood what I was asking them to do, I let them show me and tell me. It would

have been easy to be stuck at the same problem for years.

So you are going to be choosing a couple of setups that you traded in level 2. I’m going to provide you with questions to answer. Then you will need to rely on the community to help you shape that into your trading plan. Now here is the key: one or more members who

already have a trading plan need to “understand your plan.” More on that later.

The Power of a Good Plan

When my daughter was 14, I could see that she was pushing for more freedom, and her and I sat down and had a conversation. I asked her what she really wanted. She told me without hesitation that she wanted to be peer level with me by the time she was 16. She wanted mutual respect, and wanted to make her own decisions. I recognized that the time had come where she was naturally craving more independence.

I thought about it, and after a day or so, I told her I had come up with an idea. I told her I didn’t know if we could get it done by the time she was 16, but that my idea was probably the best way for her to get to where she wanted to be.

The first thing I told her was that if she was going to be free, she was going to need to create rules that make her free, and learn, over time, how to follow them. But I emphasized that she would be making her own rules from day one, and not following my rules. She liked that idea a lot.

The first thing we did was sit down with a pen and paper and I asked her questions like: “how much sleep do you need at night?” She replied 8 hours. I then asked, “What time do you need to leave for school?” Then, “how much time do you need to get ready for

school?”

As you see, I am asking her about her life. She caught on right away that we were arriving at a rule for bed time. I asked how much time she needed to fall asleep along with a couple of other questions, and soon we had the right time for her to go get ready for bed and go to bed. So I would then ask, “So do you think that 9:30 is a good time to go to bed?” She then agreed that it was obvious, and we made that a rule.

I asked, “Do you see that YOU created that rule, not me?” She agreed, and was very excited about the process.

We took a little time for the next few days to do this with everything. In a short period of time, she had a plan for her life. I also told her that this was a starting point. That experience would require that we make some adjustments.

In addition, I told her that the first year, I would enforce the plan and the consequences for breaking the plan. The second year, she would do the plan herself, but I would still enforce the consequences. The third year, she would do the plan and enforce the consequences. With respect to consequence, for example, if she did not follow her plan, she had to run around our block two times. She did not like to run at all, but recognized the punishment was good for her.

At times we would review. For example, she was feeling light headed at school by 10AM, and could not concentrate. I suggested that she eat eggs and toast instead of cereal so that the food took longer to digest. That perhaps her body was going into detox mode around 10AM. That worked.

Those two years, and even years beyond were not without their challenges. In fact, there are a couple of days I would dearly love a do over.

At age 18, my daughter was attending the University of Washington, but with the college credits of a junior (3rd _{year). She graduated with a BA at 21.}

Best of all, she is herself. Now she is 22, and thinking about her double masters in clinical psychology and nutrition. I only asked her to complete the BA. Now I’m just dad the sounding board. She and I are very close. During those years, she talked to me about just about everything. In fact, at least one thing, I would like to forget, lol.

I don’t imagine her accomplishing anything else. It’s her life to do whatever she wants. Dad just wants her to be happy, and to do what she loves to do.

I want to also mention that when she was still in high school, she was sad at times, and complained that her friends were just not working this hard and they were having so much fun. I would tell her, “Sweetie, you just keep going. You will see that you are going to find yourself in a completely different world with so many more options than they have.”

When she was 20, I think she told me exactly that. “Dad, you were right, my friends have no idea what they are missing. I think if some of them knew, they would have worked much harder.”

My daughter was the first in my family to get a four year degree. Check.

As you might imagine, when I was learning The Art of War (no easy task), I saw so many of the principles at work in my life in the past.

When I created the learning system I call Forex Art of War, you will see that I used that experience with my daughter. Without knowing it, I had been applying Art of War principles. So this is why I ask you questions about your trading, rather than teaching you how

someone else was successful, which never works. Can you imagine me trying to teach my daughter to prosper in the world by making her do things that made other people

successful?

There have been studies that show that kids who go to bed at 7PM end up more successful than those who go to bed later. This is the difference between making a decision based on some evidence, and making a decision based on principles.

The others who are not successful are not that way because of the bed time. It’s because of how they spend their time. But it would be easy for a parent to make a rule “go to bed at 7PM, and believe, based on very strong evidence that this is a good rule.

And yet it would be rules like these which would cause children to rebel the most when those rules are not working for them.

In this first section, my goal was to impress on you the importance of a good plan. That the plan needs to be based on you, and no one else, and the rewards for choosing this path are not insignificant.

Okay let’s get to work on your trading plan, and we’ll learn more along the way, here in level 3.