What To Do When Things Go Wrong…
Always get back to basics, don’t be afraid to start fresh with new systems, strategies and ideas. You have to remember markets are always evolving as should you and your strategies. Focus mainly on the process and what went wrong rather than the outcome. Reducing positions sizes, as we mention capital preservation is more important than appreciation. Record and monitor all trades so it is easy to find where you went wrong and what strategies work and more importantly which one don’t.
Patience! Every trader needs to exercise discipline in the area of patience to ensure no unwarranted positions are taken simply because there is nothing else happening. Learn to sit on your hands if a trade does not present itself. Minimise early cutting of profits as this will undermine performances of good positions.
When trying new strategies try testing in a controlled and structured manner. Make sure Position sizing is consistent and small. Keep consistency with your trade frequency. Do not enter more positions than you can handle otherwise your portfolio can become unmanageable. Plans are rational and isolate emotions and emotional responses – Stick to them.