Following your trade plan sounds easy, right? Sometimes it’s easier said than done, even for professional traders. But having a trade plan and following it is one of the most important things to check on your list when you are on your path to trading success.
My trade plan says to take profits at target 1 and quit positive with our Power of Quitting rule. This is what I normally do. But instead, this time I continued looking for trades . What ended up happening was I lost the next two trades, digging a deeper hole that turned my winning session into a loser.
Then the typical question popped in my mind, (and I know this happens to a lot of traders):
“Should I continue trading and try to get positive again, or accept the losing session and learn from my mistake?”
This is a situation you will face in your day-to-day routine as a trader. You must be prepared and avoid making this not so little mistake. If you do though, I would suggest recognizing it, take the hit, move on and learn from it.
If you continue trading beyond your trade plan rules, attempting to get positive, you might find yourself with a bigger problem.
Think about it as a business plan. If you start a business without a plan, the likelihood of success is very little. Make sure to FOLLOW your plan!
Another important thing about following your trade plan, is that emotions don’t belong in the equation. When your emotions are involved, it prevents you from following your trade plan.
Something I highly recommend is to use your losing sessions as a learning opportunity. Did you lose because of something you did outside of your trade plan? Why did you do that? Learn from it and fix the problem.