You wouldn't go on holiday without knowing where you're going, how you'll get there, where you'll stay, how long you'll stay, things you'd like to do or see, and how you'll get home.
Some people have highly structured answers to these questions with every moment planned; others have a general idea, but leave a lot of the detail to spontaneous decision-making on the spot.
Trading is the same.
You need a plan with which you are completely comfortable.
Your plan may be totally prescriptive, or it may leave room for you to exercise flashes of your acclaimed, spontaneous genius.
At any moment during a trading session, a competent trader needs to be following a well thought out modus operandi.
If spontaneous decision-making is required, the trader knows when it is required and what limitations apply (what we might term "guided spontaneity").
Day trading sessions can be both slow, in that you can wait a long time for a trading opportunity, and fast, in that you must take decisions and act very quickly when opportunities arise.
Making high-quality decisions under pressure requires well thought out guidelines.
The heat of battle during a busy trading session is no time to start thinking out new strategies or tactics.
Some people are market-intuitive enough to allow for considerable spontaneity in their trading plans, but others (I believe the overwhelming majority) need quite specific plans to guide them through the trading maze.
I am one of those people.
A plan is best committed to writing and learned thoroughly.
Write it down and ensure all likely eventualities are covered.
Writing the plan down is a discipline to ensure you have thought it through properly.
If you have trouble committing your plan to paper, you probably haven't given it enough thought.
But once you've committed it to paper, you need to learn it! Good traders don't consult notes to decide what to do next, they react to market events instinctively.
When I traded manually, I set great store on doing regular practice.
I'd work through old session charts, applying my trading plan conscientiously so that it became second nature.
The plan is your compass.
You can't know what the market will throw at you, but with a trusty plan in hand you are never at a loss, or undecided, as to what to do next.
It is the secret to acting consistently in the market, and consistency is the secret to long-term success.
It goes without saying that a plan is no use if you don't stick to it.
A subject we may return to...
I use an on-line form to describe my trading plan and I will explain the significance of the various choices that can be made in subsequent articles in this series.
Whether you use a computerised tool like this, or simply write your plan on paper, time spent in its preparation will yield solid rewards.
Nobody can hope to last long in this game if they haven't carefully defined the methodology they will use.