You have a trading plan in place.
You have rules for your entry.
You set BT to manage your trade – # of contracts, # of exits, trailing, BE, SAR, time stops, etc.
Market opens, you see your setup, you press LONG or SHORT in BT, and the trade is on.
The market moves up and down.
Your adrenalin goes up, your heart races.
You are tempted to press the Close or Reverse button.
You are tempted to adjust your stop or target.
In short, you are deviating from your plan.
What happened here?
Fear and greed…
Psychology…
How to overcome fear and greed? This is one way to do it – think of the worst scenarios first before they happen. If you accept them, then you’re good to go.
What will happen if I get stopped out? What if I were stopped out 3 times in a row? How much will I lose? Can I accept that? If yes, accept the loss when the time comes. No strategy is 100% win.
Market is nearing your stop. If I were stopped out and the market moves in my direction, I will be stopped out at a loss instead of making profits. Can I accept that? If yes, then stick to the plan. Think. If I moved the stop and the market really stopped me out, then I would be losing more than if I hadn’t moved the stop.
Market moved in my direction and nearing my target. It could be a big trend. Do I move my target? What if I take my profit now and the market goes on and I miss the “potential” profit? If I get out now at a smaller target, and market moves on, can I accept it? If yes, then stick with your plan, take the profit and don’t fret if the market goes on. You’re still profitable for that trade. Think. You might move your target and the market goes back down to stop you out. But, if you get a 2 points profit instead of 10, it’s still a profit.
At the end of the day, the fact that you are in positive territory is what counts, not the actual amount.
