- Have a plan. If you don’t have a plan, your Evil Trader has zero boundaries and will take over entirely. When you have a plan, you’ll start to notice him telling you not to follow it. You’ll hear him whisper seductive anti-plan ideas that sound and look perfectly reasonable – except they aren’t in the plan.
- Have an Evil Trader Journal. The thing with ET is that often his ideas sound great and are really hard to ignore. So as not to discard potentially good ideas, keep a log and after each trade is closed make a note of whether the idea would have been positive or detrimental to the outcome of your trade. After a period of listing these ideas you’ll be able to notice that a) ET is wrong and he needs to shut it, or b) his idea deserves some further testing as it’s possible it has merit.
- Try to make your method as water-tight as possible. A signal needs to be a signal without a shadow of a doubt. An exit needs to be a definite exit, no two ways about it. The more black and white the better, as your Evil Trader loves to second guess your judgement. Planting seeds of doubt is just the way he rolls.
- Make a check-list for those times when you’re just not sure. There will always be times when things just don’t seem so clear-cut. This is your evil trader’s very favourite moment to strike. You need to be armed with your weapons of ET destruction – aka, your check-list – to guide you through. Having a checklist on hand allows you to objectively determine whether what you think you’re seeing is in fact what the market is presenting.
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rssTrading Nuggets
- Remember that becoming a profitable trader is a journey, not just a destination. The perfect trader does not yet exist. Try to become a better trader each day and enjoy the progress you make. Concentrate on learning the craft of technical analysis and on improving your trading skills, rather than focusing solely on the amount of profit or losses in your trading.
- Congratulate yourself and feel good about a trade when you have done what you were supposed to do, according to your trading plan–regardless of the profit or loss on the trade.
- Don’t get overly excited about the winning trades or too depressed about the losing trades. Try to maintain an even keel and a professional outlook regarding your trading.
- Do not expect certainty in a trade. You are looking for a preponderance of evidence, not proof beyond the shadow of a doubt.
- The pain of standing aside and missing a good trade that your method told you to take is much worse than the pain of losing on a trade that you entered and exited properly and according to your trading plan. (more…)