By Guest Contributor, Michele Hurlbut
Creating Your Trade Plan
Not too long ago, in this very newsletter, I wrote about creating my Trade Plan. We discussed how important having a trade plan was. That it is one of the most important things in your trading success.
Here is the question I ponder today, why didn’t I follow my trade plan . . ?
After I finished writing the outline of my Trade Plan, I continued the day with creating it. I had all the items in it; Mission Statement, Descriptions of my entry criteria and my goals broken down into steps. The one step I failed to follow today was, take ONLY your set ups (as I write this, I can only lower my gaze and shake my head).
The second most important thing in trading is to Follow Your Trade Plan! I did not do that today.
Following Your Trade Plan?
Two days ago, I followed my trade plan perfectly and I was rewarded for my efforts.
Today, I did not…..
I submit the proof here….
Tell me, does this bottom chart look anything like the chart above it? I hear a resounding “No” coming from you, dear readers.
This day I was not patient. I did not wait for my entries to be clear. I had hubris as I “knew” the Dow was going down and I reacted to almost every “opportunity” to get on instead of being patient . . .
You can say that I was not wrong with my “predictions” however, did I follow my trade plan? No, I did not! And then, to make matters worse, I cut my winner short because I had taken such a beating earlier and I got spooked.
It seems hard to believe that the person who traded the top chart so beautifully is the same person who, two days later, traded the bottom chart.
Are Your Emotions Getting in the Way?
I find it very interesting how our emotions can get in the way of our trading. One of the purposes of a trade plan is so you can trade without emotions, so-to-speak. We all have emotions and it is not easy to trade without them being triggered. That is why having something in writing with specific instructions on what you are looking for and what to do when you find it is important. Without it, we end up with days like I did.
I have come a long way in working through my emotions so they don’t affect my trading. Occasionally, some wires get crossed and I don’t follow my trade plan. So I am baring my soul to you in hopes that it keeps you from letting your emotions and hubris from taking over your trading day.
And, if by some chance it doesn’t, I hope you find solace in the fact that you are not alone.
Now it is time to pick myself up, dust myself off and pull my trade plan out of the folder and keep it by my side for tomorrow’s trading adventures so that I do not repeat today’s mis-steps.
Here’s to Following Your Plan and Happy Trading!
Great trading everyone and speak with you again soon.
Join Randy in the next free LIVE Hawkeye Demonstration Room held every Wednesday at 9.30am EST US. You will learn more about volume and volume price analysis and see more examples and live trade setups. It is open to all.
Learn to trade the Hawkeye way.
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