One should treat trading like a business. In any successful business there would be a business plan. So for any successful trader there must be a trading plan.
There is a cheesy line but very true which is something like - failing to plan is a plan to fail.
Some of the best and most successful traders in the world will have and are more likely to have a trading plan. I would be surprised if they do not.
This trading plan can be an evolving plan which can be changed and adapted as situations change, knowledge improves, experience is gained, etc.
We have seen some remarkable trends in 2019. We have seen Bitcoin in the first six months. We have seen the major US indices. We have seen Bonds for around seven months of this year.
One can trade different assets using trend following principles. It really does not matter what the asset is as long as it is trending strongly and one can profit from its price movement. I think trading different assets using trend following principles allows a form of diversification. It really does not matter as you are trading based on price action and it is the price action that is important rather than the name of the asset.
If you are stubborn and refuse to trade some assets due to personal beliefs, ego's, etc. then you face a real chance of missing out on the some of the potential trends that can significantly enhance your trading performance for the year.
Diversification can also be used as part of a risk management strategy.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.
The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.
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