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Chapter 29, Part III. Dealing Directly With Trading Plan (Finally!) Page 8

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 27, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Commander in Pips: Third, you have an action algorithm - what you have to do at any specific moment.

    Fourth, you specify right before the trade the risk value and decide to trade or not to trade in this particular case.

    Fifth, by following your trading plan you control your emotions, since you act not occasionally but strictly by predefined actions. If emotions will override execution of the trading plan – that will clearly show you that you make a “mistake”, so that later you will see that you were wrong by stepping out from your trading plan.

    Also, here we’re discussing a static historical chart, but when you are one on one with the market in real time – that’s quite another story. Pressures increases significantly, and to follow some predefined wise actions is much simpler that to trying invent something on a road.

    And the last one, but not least – always following the trading plan falling in some positive habit and improve your discipline.

    Pipruit: Well, I agree with all statements, except “mistakes.” How we should treat the situation, when I’ve followed the trading plan but lost money, and my stop has been triggered. Will it be mistake also?​

    Commander in Pips: No. “Mistake” is when you do something wrong, in opposition to the rules. For instance, you do not follow trading plan, occasionally increase your risk limit, place tighter or farther stops that is opposite to your trading system, change entry/exit points by gut feeling, increase lot size etc. If you do not break the rules and get loss – this is not the “mistake”. Trading is a probability business. Sometimes, and very often you finish with loss. The most important item here is to have a system that has a positive probability of success. If you do not make any mistakes, but loose money anyway – then this will be the sign that your trading system is bad. Here is another useful feature of trading plan…
    #1 Sive Morten, Dec 27, 2013
    Lasted edited by : Oct 9, 2016
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