Lack of a Definite Plan

Disciplined traders devise a very detailed trading plan; strategies that fit their personality. What…no plan, no TradeLog, no diary?

How do I devise such a plan? Hey, no one said it was going to be easy. You have to think about it…put all this knowledge you have been garnering down on paper. Keep it simple…does that sound familiar? It does not have to be elaborate; just a plan for actively doing something; achieving an objective to control your risk.

How do you make sense of it all?

Here’s how…

• You have to know you are beyond the basics.
• Know thy self. Your emotions are under control…fear, greed.
• Paper trades have been consistent…more wins than losses. Don’t lie to your self.
• You have kept a TradeLog and diary of your trades…You haven’t? Shame on you!
• Studied after the close…Hey, it’s your money.
• Strategy…Know what to do when unstable factors occur.
• Strategies that fit your personality, and your risk management.

Some of my astute students make a list…not really a plan but a compilation; just several notes grouped together to get your head straight before the open (Look familiar RS, and TB?).

1. Check the 24 hour session for support and resistance, gaps, trend.
2. Briefing for reports, pivots
3. Long term trend direction

Notes:

• Where are support and resistance
• Open Gap
• Gap closing (using the 10-Minute Chart)
• 10 o’clock reverse. Reverse or not to reverse
• 30-Minute Breakout…magic numbers, and technique (3 ways; make a decision)
• After the first hour…Moving Average strategy; market in sync
• Buy the low on bullish bias days, low is usually made in first hour or two
• Pattern…look for one of the fifteen for a breakout set-up
• 12 o’clock Hop or Flop
• Look for that move to the low during the doldrums – between 1 and 2 o’clock
• Reversal time zones…stay focused
• Trade with the trend
• Feel the pulse of the market…scan my indicators often

Now if you believe… that all of these factors are in your favor, you should be able to make lower risk trades. You won’t win them all…this method tries to keep you safe; very conservative.

PowerTrades…

High risk trades; you know the ones; trading against the trend, no muscle (Magic Numbers), trading at the high and low of the day, trading in the first and last hour of the day, market not in sync. Need I go on?

PowerTrades take experience…you really should have a written plan and understand the risk involved. Discipline is required to hold on to the trade when it starts to move against you. A reasonable expectation is expected on the basis of that trade; knowing when to hold them and when to fold them…is a must.

Anticipation and predicting your entry, target, and stop loss…a must. Being able to pull the trigger when you see the set-up…is a must -- when in doubt you will stay out, controlling your emotions at all times.

The winning trader is a disciplined trader. Disciplined traders devise very detailed trading plans…especially high risk strategies. You must follow your rules…or you will lose.

You must control your impulses to be a gun slinger. Eager to pull the trigger on intuition in a trade without a plan is a sure way to go broke in a hurry. You must know your limitations; there’s a faster gun on the other side of the line. A perception of an obscure trade; one that is not clearly understood is a sure way to ruin your day…Always define your risk, then you don’t have to worry about it.

PowerTrades lead to mistakes…You must accept, even embrace mistakes, and learn what you can from them; take steps to prevent repeating dumb mistakes. Listen to yourself and don’t take your cues from others. Follow your plan…your rules.

No matter how successful you might become or how much you achieve, somewhere along the way you will make a mistake. It’s not the mistake that ruins people. It’s how you react when you make the mistake! From this article, we can see three things that show us how to handle mistakes.

1. Keep your mistake in perspective – you followed your rules; limited your risk.
2. Don’t allow your pride to keep you from going on. Mistakes are a part of life.
3. Get back in action as soon as possible… Many times when people make a mistake, they get embarrassed and they stop what they are doing. Sometimes they never step out into that area again. This is tragic.

Marsh Jones