- See trade
- Take trade
- Set stop and (optionally) target
- Tighten stop if appropriate
- If stop or target not hit, go to 4
Psychologically, however, trading (can be) very difficult and stressful. Why is that, when the activity is relatively simple ?
Fear. Just plain old garden variety fear.
Fear of losing money.
Fear of giving back money.
Fear of something bad happening.
Fear of being wrong.
Fear of failure.
etc.
I struggle with fear every bloomin’ day. It causes me to miss good trades and to exit good trades too early. I am making some progress on it, but not nearly quick enough to suit me. For me, the best antidote to fear is concentrating on steps 4 and 5 above. In other words, I’m trying to focus on the process, not the outcome.
Maybe I need this tattooed on my mouse hand :
Just move the stop, dumbass.
The best traders have learned not to be fearful. They have confidence in their methods and know that they will make money over time. Not necessarily today or tomorrow, but in total.
One of the best books I know to see how great traders do it is
Market Wizards: Interviews with Top Traders by Jack D. Schwager (which I will read again soon, and again and again until it finally sinks in, lol)
“Named must your fear be before banish it you can.” -- Yoda