Hello Traders,
Thought I'd drop a few small updates in between some of the bigger posts just to let followers of what I'm thinking or doing while trading. Had a fantastic day yesterday, but today hit my loss limit for the day early and my risk management plan says stop. Just got whipsawed early, out of sync a bit. Doesn't happen that often but it does happen. Of course being a trader I couldn't look away and sat on my hands and let the next 3 trades go by (winners) but, still followed my plan. Stings, but it happens. Got a little Miffed? Yep. That being said, is it better to change my plan because I had a couple of losers in a row? Absolutely not. Past trade results should not change how you trade the next trade. They all stand on their own. Can I adapt and make my plan better based on this information? Maybe. Look for the positive and apply what I can for the next day and move on. That's trading... Just talking with a trading colleague saying that that's one of the hardest things in trading is taking losses but its all part of trading if you're following your plan. I'm a reactive person by nature (remember my background is engineering) who likes to solve things immediately, so in the past losing trades would make me trade MORE in an effort to make back anything I lost. There's an excepted term for this: Revenge Trading, and boy was I going to show that market. Ha! Sometimes it would work, most of the time the hole dug was deeper... and I vowed at the time not to do that again. A while ago I reached the point where I can actually do this. Not an easy task. My advice is if you find yourself in this place, work to solve it sooner rather than later, you'll be MUCH better off. Even though the losses sting you'll live to trade another day. -Trader Joe
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Author"Trader Joe" trades the Emini S&P exclusively and is the main influence behind EminEdge.com. Archives
March 2020
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