Trade The Plan

I hope people are taking note of the lessons I'm learning in the market, as they are very valuable and will save you time, money and emotions as you trade.

Let me share with you some of the things I've learned since last night and continue to learn more than once. Thankfully the things I've learned since last night were in my sim. account.

Last night I decided to do more than 1 contract. In fact, I put on 3 contracts, legging in. For those not familiar with "legging in", that means you don't start off with all 3 contracts as an entry. You look for 3 separate entry points to get in. Sort of like good, better, and best entries.

What does this mean?

This means your first entry may be good, as it LOOKS like the beginning stages of a reversal. Your second entry has greater confirmation of the reversal, and your third entry is a definite area where it has already well into the reversal.

Anyway, that's what I did last night.

My stops were in place for taking profits and costs. I read my indicators correctly and gave a lot of room for things to move, looking at longer timeframes of 15 & 30 min. to make my decisions, which now I see they were the right decisions. In fact, they usually always are.

This morning when I got up, I see my position had turned very much against me, but my stop cost had not been triggered as my criteria hadn't been triggered. Last night I seemed to be making sound judgments, as I had been trading for a number of hours and was in the zen of things, sort of, minus my daughter having upsetting behaviors. Of course, this does impact trading.

Well, as I saw things moving quicker against me, though my stop costs not hit, I just flattened all my positions (3 of them) and got out for a -2762.50 plus commissions. I saw ALL this RED and unfortunately, I had my account status up. This is in my virtual account. Needless to say, that's been my single worst cost in futures so far and very upsetting.

Did I use any indicators or sound judgment to get out? NOPE. I just looked at how much my position was against me and I flattened. Had I taken an extra minute to do that, I would've seen there was bearish divergence.

Anyway, my kids were pills this morning and our household was in super havoc. The kids got to school late, didn't get to eat breakfast, everyone was upset over various things. I needed to get the car washed because I just needed to calm my mind down. The car wash people said I had YET another chip in my windshield and I felt sort of like I wanted to just fly off the handle, but that wouldn't have been good.

Plus, the other carwash guy wanted to upsell me on paying $3 more to have my tires cleaned. Well, duh, this is the desert and I have a SUV and kids, they are supposed to be dirty. Yes, it's just $3 more, but I figured, I'll give it to the guy or gal that's wiping down my car for minimum wage, if even that. All I wanted was my car vacuumed out and the outside cleaned. I didn't give a frick whether my leather seats were amour-alled or not as 2 days from now, my car will look like it looked before the wash. Just give me the $4.99 wash and let me be on my way.

Normally I'm very courteous and patient, but I just wanted some peace and quiet.

My trades were on and I had my stops in place. I carefully assessed what the price chart and my indicators were telling me and though it was just starting to reverse and I had to leave, I decided to just let the positions play out. I had 3 contracts on the table with the stops (profits & costs) in place. On a larger timescale, it said bearish divergence, as well as the smaller timescales, so I just let things do their work.

As of this writing, I'm down down -500.00. There were 2 positions I wanted to put down near the target I had of 1137. But, the lowest I went was 1154. The smarter thing was to have one at the 1157, 1148, 1140, but allas, that's okay. I was able to recoup most of the costs this morning and will recoup the rest in the next 1.5 hrs before I need to leave.

Thankfully this was not in my funded account, rather virtual as there are some important lessons to learn here:
  • Do NOT trade your account (keep this turned off if possible)
  • Do NOT trade on panic or euphoria
  • Make quality trades with emotions under control
  • Follow the trading strategy
  • Appropriately set your stops (profits & costs)
  • Let the pattern play out
  • Check longer & shorter timeframes
  • Patience
  • Take a deep breath and calm down
  • Do not chase trades

One of the things I learned in college playing racquetball is always setup for the shot. Racquetball is a fast moving game, but there is always time to setup for the shot correct. You do this by properly positioning your feet, setting your hips correctly, arms/wrist/racquet in place for the shot. You know where you want to place the ball exactly.

Granted, as just spectators in the market where very few of us have account sizes that can have any impact to the market, which would probably be all my readers including myself, we cannot say how the game is played. Afterall, we are dancing with the gorilla and you always let the gorilla led, and tell you what it wants to do.

But, you can always position yourself to have good entries and exits in trades.

As I analyze more of my trades to see what could've been done better, I'm finding that it's not my trading plan or strategies that are in error, rather they are not properly positioning/setting up my plays and not following the trading strategy as I ought to.

Yes, you may want to be in a trade right now, but if it doesn't look good and it doesn't meet the criteria of your strategy, stay out. It's really aggravating to see that the majority of my trades that go against me are not due to that, rather it's due to impetuousness.

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