- A sideways market?
- A trending market?
- A trend continuing;
- A trend reversal?
- Getting stopped out of a trade?
- Winning a trade?
- Breaking even?
- Losing a trade?
All questions that need to be answered if you are to have confidence in your trading system. For it is confidence that allows you to profit from the markets.
Ridiculous notion? Perhaps. But true nonetheless.
You see, despite our civilized veneer, we are still animals that react to fear, the most powerful of emotions. And it is fear that supercedes our thoughts when we trade.
To circumvent fear, you should develop trading plans, trade according to plan, and analyze your trades in a trading journal. As do this, you will build a database that will create statistical patterns of your trades. This can be studied and help you to predict the outcome of future trades.
And it is this knowledge that gives you your confidence to spend your valuable time creating trading plans, trading according to plan, and analyzing your results.
Without this knowledge, we are frightened beasts that depend upon our fear to trade. And this is disastrous to our bottom line.
So make the choice, trade with fear, or trade with knowledge.