One of the biggest challenges traders face is not letting emotions affect their decisions. It is very important (and often times difficult) to remain objective when reading price action. In my case, having well defined entry and exit rules help me stay the course. In the chart below, you can see the entry and exit for WWWW which reached its target today. The stock might go higher from here, but there is a great risk of a turn lower after touching a previous price area where it found a large supply. Specially within the context of the negative price action in the market.
Coming up with a trading plan is not easy and it is not the end of the road. A good trader always keeps tabs on the plan’s performance. I programmed this basic free trade analysis tool to help you see how well your strategy is performing. Of course, more advanced performance analysis features can be used in the Journal.
WWWW Target Reached
Trading a plan takes time. The key is to keep your risk consistent with every trade.
Understanding risk is the holy grail of trading. It was the last thing I learned when I was a beginner. It should’ve been the first thing I learned. As soon as I learned where to exit, how much to bet, when to enter, and calculating the loss before the trade is executed…… I started to make money
As the old saying goes “Worry about the losses, the profits take care of themselves”
Good luck fellas.