Injecting logic in trading refers to the practice of incorporating rational, analytical thinking into the decision-making process when making trades. This can involve using a variety of tools and techniques such as technical analysis, fundamental analysis, and risk management strategies to make informed and well-reasoned decisions about when to enter and exit trades.
The goal of injecting logic in trading is to minimize the impact of emotions and biases on trading decisions. When a trader is able to make decisions based on logic and evidence, rather than emotions such as fear, greed or hope, they are less likely to make impulsive or irrational trades and more likely to achieve success in the long run.
By using strategies such as creating a trading plan, setting stop-losses, and taking frequent breaks, traders can help to stay objective and avoid falling into the Tilt that can lead to impulsive decision-making.
Injecting logic in trading also includes keeping a trading diary, reviewing past trades, and learning from those experiences. This helps to develop a trader’s understanding of the markets, and to identify their own strengths and weaknesses in order to improve their performance over time.