Let's we go back to the time when I was still new about trading especially in futures. Back then when I wanted to trade, I always made trading plan first. Funny thing was after I entered a position and join the crowds, I became more impulsive, react to emotion instead of using my intellect, and deviated from my original plan.
People are likely to be rational when they are alone, and grow more impulsive when they join with crowds. The movement of price can hypnotizes traders , the bigger the fluctuation, the stronger the emotions. The more emotional market, the less efficient it is, and creates profit opportunities for calm and disciplined traders.
Before you trade always make a written plan, when you enter/exit the position, the reason and evaluate that.
I made a decision making tree for my trading guidance. It didn't make sure gain to me, but it made me to stay on the course when I was still at the opening position.
|A Simple Decision Making Tree for Trading|
We all start out as beginners. A trader with good plan shows a development. A beginner never writes down a plan because he is too lazy to write or has nothing to write. He is having too much fun chasing hot tips and then try to make a good entry.