TRADING PLAN: Understanding The Value of A Trading Plan, 27 June 2017 @supertrader
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On 24 June 2017, I wrote an article on being bullish on Stratis and advised:
"wait for the confirmation of taking out of a minor top, marked as the "Entry" point on chart"
The 2 key words here were WAIT and CONFIRMATION.
As we see on the chart below, we had NO COMFIRMATION, as a result there was no long entry resulting in us not losing any of our hard earned monies.
What value then is talking about a trade we didn't even take then ?
Two things, can be gleaned from this for a profesional trader:
- It prevents us from entering losing trades, which had we just jumped it it would have eroded our successful profitable trades
- It changes your mindest to FLOW with the market. Clearly following a "flag" setup the buyers ran out of steam (excuse the pun given the platform i'm writing on) but the sellers instead took the reins and asserted themselves.
By training yourself to have a NEUTRAL MINDSET this opens up more and more potentially profitable setups and opportunities which other traders either cannot see or miss from being stuck in their view as to which direction the market is "destined" to go.
As professional traders, when we place a trade or carry out our analysis to pick a direction, the first thing we must do is EXPECT the trade to be WRONG. What often inexperienced traders do is foccus on how much potential money they have convinced ourselves that they are definitely going to make, as there is no other option but for the market to do "exactly" as they analysed.
The fact is we have zero control over the market but we do have 100% CONTROL OF OURSELVES.
By having a neutral mindset this now allows you to REVERSE our thinking and take action but entering a potentailly losing trade to a realistic profitable trade by going Short.
Hope this helps.
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Analysis by: Sean Vengan 27 June 2017
To have a larger view of the chart, just right click on the chart image and select "View Image"
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