Why you must NOT follow your heart when trading
Does it feel good?
Is it written in the stars?
Do you nipples tell you it’s a buy?
There is no place for feeling in the markets.
You need to resist temptation to follow your proverbial heart and opt for a more mechanical, strategic, and analytical approach to trading.
Does this trade feel good?
Emotions can cloud your judgment when trading.
The desire for a trade to “feel good” can make you take impulsive trades.
You’ll base the trade on hope and intuition, more than analyses.
You’ll look for trades that aren’t there. You’ll be driven by fear, greed and FOMO.
Do you have a good feeling about this trade?
If you’re going by your instincts, you’re playing a dangerous game in trading.
“Having a good feeling” means you are “overconfident” with where the trade will go.
If you want to be successful, then prioritize research, technical analysis, and risk management over relying on their feelings.
Do you believe the universe will reward you with this trade you take?
Then you get luck, spirituality, pseudoscience, clairvoyance – you name it.
Believing in luck or destiny when it comes to trading is a recipe for disaster.
The universe doesn’t have a say in the outcome of your trades.
Trading is nothing more that probabilities and statistics, not cosmic rewards.
There is price, sentiment and volume.
There are machines, robots, AI advisors – that are also driving the market.
And they are most definitely not basing it on the position of the moon.
Forget it. Cut out the emotions, feelings, and instincts.
Just stick to what I’ve told you about in the last 20 years…
Develop a solid trading plan and strategy
Create a well-defined trading strategy with clear entry and exit points, risk management rules, and position sizing guidelines.
Stick to this plan religiously, regardless of how you feel about individual trades.
Use technical and fundamental analysis
Base your trading decisions on objective analysis of market data and trends.
Technical indicators, charts, volume, and economic fundamentals.
Whatever your strategy is – stick to it.
Implement risk management
Set stop-loss orders to limit potential losses.
Diversify your portfolio to spread risk. When one market is not performing well, look to other favourable markets and conditions to help your account.
Never risk more than you can afford to lose on a single trade.
Stick to your trading plan and just don’t deviate from what you know is profitable and successful in the medium to long run.
Emotional decisions can lead to costly mistakes.
Trading is a numbers game of analyses and strategy.
It’s not based on intuition or feelings.
Hone your analytical skills and you’ll own the trading game.
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Enjoy and remember…
You won’t need to buy or order another book on chart patterns and candlesticks ever again as I will be updating it very often and will let you know.
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