This morning I took a short trade on EURGBP.
It comprises two entries and exits – with the first entry being closed quickly after I considered it premature, and the second initially being monitored comfortably but eventually it getting the better off me and me not following my ‘trade management rules’. It’s interesting because it’s a real example of how my emotions/psychology/feelings impact on my trading decisions and behaviour.
By the way, ‘Trade Management rules’ govern questions how and where to set stops and targets, when/if to move stops and when to close a trade immediately.
Below is the screenshot that’s going into my journal today
There are a lot of notes on that chart – to save you from destroying your eyes in trying to read the detailed notes, I have outlined the main points below the screenshot.
- Entering prematurely gave rise to frustrating and painful feelings
- Entering on the valid setup (each trader defines ‘valid’ for him or herself) made me feel comfortable and helped me to manage the position properly
- Even when all my rules are nicely set out (and clear) I still can have difficulty actually following them
- Once again, not being able to bear the pain resulted in me closing the trade at a terrible price level
- Trade Management is a lot easier if starting with a valid setup
- I am actually able to feel good/bad/anxious/frustrated/scared/comfortable and be self-aware about it whilst I trade.
I believe that in order to progress/develop/grow as a trader, one needs to constantly review and learn from the completed trades. Hence why I try to document every single trade. Not every trade has a groundbreaking insight – but some do!
There are a tonne of psychology-related blog posts on the site here. Check them out at your leisure.