No Plan, No Trade
The markets ready to open and you are ready to start trading, well really to make all that money that traders make……right? The market opens and green and red flash on your screen. You see the top names in the % gainers list and XYZ is already up 50%…..panic starts to set in that you will miss what will surely be the last stock to make a parabolic move….you get a bad case of FOMO …fear of missing out, something you did not even know existed until now, and you hit the buy button. The stock inches higher by .20 cents and you are licking your chops, planning on how you are going to spend all that money when the stock doubles, then as quick as it went up the stock is down .20……no big deal……..then .40…..fear and doubt quickly take hold……now down .70 cents you have the deer in the headlights look and are frozen in disbelief…….down $1 and you hit sell and puke the entire trade up in a nice fat loss.
So easy a Caveman can do it ……..right?
Mother market is ruthless in her lessons, and you will not survive her wrath if you think you are smarter than her. Not every setup you trade will work, you will have losses……but before you enter ANY trade you need to have a clear plan for that trade, if you don’t you sit on your hands and watch until you can plan a setup with the following:
- Entry: where and why?
- Risk: where and why?
- Managing the Trade: how and why?
- Exits: what are your options for exits, where is the price likely to go?
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