A Trade A Day

I was having a conversation with another trader yesterday on the subject of trading ideas. What a surprise! Well, we were discussing the merits of a setup he was considering and I did my best to point out, what I considered, to be the merits/faults in this potential trade.

So today, I emailed him and asked if he took the setup. To which he replied that he considered what I said and that he didn’t take the trade. What really bothered me was that he said he may have chickened out too!

Ugh! Being scared is not an option. There are too many well capitalized, seasoned professionals ready to take your money. They have taken a good deal of mine and I’ll be damned if I’m going to let it happen except on my terms.

Look, I’m not Mr. Titanium. I feel fear, but if you feel fear when trading, it’s time to step away from the keyboard for a period of time.

So how do you at least mitigate fear?

Trade with a plan

I know. It sounds cliché, but it’s true. Trading is so much easier on the psyche if every action is orchestrated and planned out. Are there scenarios that occur which I didn’t plan for? Sure, but I thank the market for that piece of wisdom and modify my rules if necessary. I’ll post a sample trading plan in the near future. Suffice it to say that my plan contains the following:

1. What day I will trade
2. What time I will trade
3. What market I will trade.
4. What my risk per trade/day/week/month will be.
5. My entries
6. My exits

Trading plans can get be as robust as you want them, but it doesn’t need to be much more complicated than what I’ve listed above. I also like to include what my mindset will be, what I expect out of a trade, what I expect out of the day, scenarios where I won’t trade…etc.

If you don’t believe you have a well thought out, well researched trading plan. Don’t trade. When those bad days come and bad days turn into bad weeks, a plan is going to give you confidence to keep going. It will give you the structure you need to keep from flip flopping methods, over trading, and ultimately losing your stake.

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