Plan The Trade
When your money is on the line, it's natural to feel afraid. As much as you try to forget, it's hard not to worry about losing money. There are times when you may feel so panicked by the chaotic moves of the markets that you can't think clearly. You may feel agitated and on edge. It is at times like these that you need to do anything you can to keep calm and trade with discipline. One of the best strategies is to trade a detailed trading plan.
A detailed trading plan can help you stay calm during the storm of market action. Before you execute a trade, specify precisely how and when you will enter, the signals that indicate that the market may be going against your trade, and how and when you will exit. Many unprofitable traders don't carefully plan their trades. They impulsively execute a trade and then think they can develop the plan as they go along. What usually happens is that they panic easily because they don't know what to do and when to do it. It's hard to think on your feet, especially when your thinking is blurry because you are afraid of losing money. A detailed trading plan helps you stay focused. The more clearly the plan is laid out, the easier it is to follow, especially when you are agitated and upset. And when the plan is easy to follow, it's likely that you'll stick with it. You'll be disciplined and in control of your emotions and thought processes.
The difference between winning traders and unprofitable ones is the ability to muster unwavering self-control in response to chaotic, ever-changing markets. Trading is serious business. It's not a hobby, but many traders approach the endeavor as if it were recreational gambling. They don't develop a trading plan, and if they do, they tend to abandon it prematurely. Winning traders, however, are methodical. They carefully develop a trading plan, execute it, and stick with their plan. If you want to trade profitably, develop well defined trading plans and follow them.
A detailed trading plan can help you stay calm during the storm of market action. Before you execute a trade, specify precisely how and when you will enter, the signals that indicate that the market may be going against your trade, and how and when you will exit. Many unprofitable traders don't carefully plan their trades. They impulsively execute a trade and then think they can develop the plan as they go along. What usually happens is that they panic easily because they don't know what to do and when to do it. It's hard to think on your feet, especially when your thinking is blurry because you are afraid of losing money. A detailed trading plan helps you stay focused. The more clearly the plan is laid out, the easier it is to follow, especially when you are agitated and upset. And when the plan is easy to follow, it's likely that you'll stick with it. You'll be disciplined and in control of your emotions and thought processes.
The difference between winning traders and unprofitable ones is the ability to muster unwavering self-control in response to chaotic, ever-changing markets. Trading is serious business. It's not a hobby, but many traders approach the endeavor as if it were recreational gambling. They don't develop a trading plan, and if they do, they tend to abandon it prematurely. Winning traders, however, are methodical. They carefully develop a trading plan, execute it, and stick with their plan. If you want to trade profitably, develop well defined trading plans and follow them.
posted by nomadhunter at 7:09 PM
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