Over these five lessons, we are going to give you five important, yet very simple concepts that should be a part of every trade you do. These are some of the very things we train our VCM traders to do, to increase the odds of every trade being successful…

We have received many compliments on this recent series of lessons, "Increase Your Odds Parts 1-4". This is part five, and without a doubt the most important one. This one is so important, that it can be boldly stated: "If you do not follow this one, you will not make it as a trader!" Only the ones that follow this step are rewarded.

Did you notice something else? There are no charts on this lesson. That is very rare. However, it goes to emphasize the importance of this step, that this all-important step is not about 'the charts' or anything technical. It is about how to protect yourself from your most deadly enemy - you.

If you are new, you may have stopped reading this lesson. If you have been around a while, you maybe just had a sigh of relief, because you no longer think you are crazy. Have you ever been up more money than you intended to make in a day, only to give it all back (or more?) by the end of lunch? Did you ever go day after day, without actually trading the strategies you intend to trade? Do you ever make a critical mistake, like chasing a stock, and swear you will never do it again; and then you do it the very next day? Did you ever sell a stock early, to 'lock in the profit', only to see it exceed your target? Could you right now, stop reading this, and write out the exact method you use to manage your positions?

How do you protect yourself from yourself? There is only one answer. That is to create, rely on, and maintain, a working trading plan. Notice the three italicized words. This short lesson cannot begin to teach the total concept of creating a trading plan, but it can emphasize the tremendous importance. Notice it does not say to just 'use' a trading plan. Out of all the traders out there, most do not attempt a trading plan. Those that do, never finish one, or never create anything of value. And those that have written (or acquired from someone else) a basic plan, unfortunately, don’t use it. It is a very small percentage of traders that create (you will find out that you will learn more writing your plan, than all of the study you have done in the past year), rely on (they have to use their plans as their guide during the day, they 'cannot trade without it'), and maintain (review, check your plays, track results, and make changes when needed) a trading plan.

There is no better way to monitor and improve your trading. If you go out in the market and do something different everyday, how do you duplicate the results of a winning day? How do you avoid the mistakes of a losing day? How do you even know the difference (e.g., sometimes 'good' plays stop out, and 'bad' plays make money)?

The summary of the series on how to 'Increase Your Odds' is simple. This last step we are talking about, is actually the first and most important step. Before you take any trade, before you even look for any position, make sure that you are following all the rules of your trading plan, and that you wait for your planned trade to setup.

Successful trading requires, "Having the KNOWLEDGE to create and maintain a proper trading plan, having the PATIENCE to wait for that planned (low-risk, high-reward) setup, having the DISCIPLINE to manage the trade as planned, and then having the WISDOM to evaluate the results against expectation in the plan."