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LESSON: Being Blinded By Money

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[op_liveeditor_element data-style=””][text_block style=”style_1.png” align=”left” font_size=”16″ font_font=”Montserrat” font_color=”%237e7e7e”]Have you ever noticed how clearly you can call the market when you are not in a trade compared to when you are?

When some traders get into a trade and risk money they freeze up and the blinkers go on. This is very common BUT, does get better and better as time goes on and more and more trades are made and more and more decisions are made in the market.

Stepping Process

Some traders will watch the market clearly go against them then stopped out. After they are out of the trade and the money is off the table they will have a look at the trade again and it will be as obvious as daylight to them that the market was clearly against them, but they just couldn’t notice this when they were in the trade!

This is super common and all the trader was trying to do was avoid pain as we had discussed previously. The trader was oblivious to what was going on because they had the money blinkers on. It is much easier to make clear decisions when you are not in a trade.

The way to fix this and combat the money blinkers is to write up a trade plan. Trade plans are plans that you write up before you enter the trade. These plans will have information such as;

• Entry price
• Stop price
• At what price you will move to break even
• Where you will target
• How you will manage the trade after first target is taken off

Your Trading Plan

Basically a trade plan will cover the exact way you plan to manage your trade.

It should cover how you will take profit and at what price you will move to break even and if you will trail your stop.

Writing up a plan like this, will help you overcome some of the fears and psychological pressures the market can place on you, it will help you manage your trades more effectively.[/text_block][/op_liveeditor_element]