He called me in a panic.
“I’m in a position and it is going against me badly!”
I asked him where his stop loss order was. He told me he didn’t have one. He told me that he was so confident in the trade that he never considered that it would go against him.
Now, his mind is blown. He can’t think straight. His emotions have taken over. He was sweating hard. His heart was beating hard.
I asked him what his plan was when he entered. He said his plan was to take profits at a level which was 100%.
I said, “that’s not a plan! At best, it is half a plan!”
I told him to immediately eliminate the trade and take the loss. That clears his mind and he can think clearly again.
But the initial error was that he didn’t have a plan. He winged it. That is a recipe for disaster!
I’ve put together a mind map which outlines the critical things you need to think about to plan your trade. You can get it here. It’s free.
Having a plan creates a calm feeling about your trading. You know what to do no matter what happens so you do not have to make decisions under pressure.
Pick it up here and really study it.
Make sure that you consider each factor when you look through it.