Do This Before You Think About Making Profit!

Hi Traders. Today's topic is something you must experience in the path to consistent profitability. How many times have you allowed big winners rolled into a losers or break-even? If you're still having the mindset of "at least I get the direction correct", It is time for you to truly reflect on your performance and psychology, and I hope this post would give you an 'Aha moment'. Why is trade management so crucial? Believe or not, majority of traders do get their entries correct, but because of the way they manage their positions, it eventually creates frustration and lack of confidence (self-sabotaging). So, what is considered to be a proper trade management?

1. Trading plan - Majority of us jumped into the market before having a strategic plan to attack the market in a consistent approach. To be consistently profitable, you cannot allow yourself to have different perspective every time you look at the charts. A good trading plan should consists of the instruments you're trading, strategies (back-tested), entry criteria, exit plan, max daily loss, max drawdown, session & timeframe, the lists goes on. Always follow a process, if you do not have a fixed plan, you'd never have consistent action and result. You must give it enough time to develop and allow your edge to play out.

2. Emotional detachment - By managing your positions in a systematic approach, you're not getting involved too much psychologically. Execute a setup according to your checklist, if its right its right, if its wrong its wrong. The market is never against you! To be consistently profitable, you need to remain neutral bias and respect the market, and trade what you see, not what you think. The best traders out there do not have much opinion in the market, simply because they respect the market and they know the market can do whatever it wants. If your exit plan signals you that the market is not going according to your plan, cut it off without hesitation, there's no point letting it runs and drains your energy. "Markets can remain irrational longer than you can remain solvent" - John Maynard Keynes.

3. Confidence - I have received plenty of DMs regarding how to build up their trading confidence. Hesitation comes from fear, if you are hesitating before pressing that buy & sell button, simply do not trade it because you are unprepared. Practice more, appreciate your losses. Personally, I've learnt more on my losses than wins, someday when you look back at all those stupid mistakes you've made, you will realize how much you've grown as a trader and human being. Losses are nothing but a small tuition fees, stay positive. As long as the risk is well-defined, you will survive in this business. Build up the discipline to strictly comply to your trading plan, journal them, and allow the expectancy to work out.

Always be confident! Trade safe.

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