Monday, May 18, 2009
“Scared to Pull-the-Trigger”
I see the set up, I go as far as having an order in and just as it gets to my price, I pull my bid. This is not an issue of the trade setup, because it’s an all too familiar scenario of running scared. And sure enough, when I don’t get into the trade, the market moves off to what would have been a quick, painless and tidy profit.
Do you have a written trading plan that includes reward to risk parameters to keep you on course?
Consider this exercise: Write out a trading plan for that trade you couldn’t pull the trigger on. Define your trade setup, trade entry, stop and profit target. In order to re-script doubt into confidence, you need to be active in redirecting the scene, just like a movie director. The following example could be one small component of your new written trading plan.
For Example: If your trading platform allows for the use of OCO bracketed orders (OCO means one cancel other), investigate how to use them by calling the brokerage firm or by using the online help/tutorial. Place your next trade using a bracketed order where you have a resting buy order at your researched entry price and when that order is filled, you have two orders that are triggered: one is your stop and the second is your profit target as defined in your trading plan. If either your profit or stop order is filled, the trading platform automatically cancels the other order. By redirecting how you enter orders and simultaneously manage the risk of the trade, you can overcome doubt.
Do you fully understand what’s going on emotionally that causes you to get off course?
Fear of loss challenges all traders more often than not. Acknowledging fear “face-on” is the only way to defuse its grip. However, admitting being scared triggers weakness. Most of us have conditioned ourselves to deny fears grip. Instead, we unconsciously flip it on it’s side, replacing it with an arrogant pursuit of control and predictability. The brutal fact about trading is, that all one can control is everything leading up to pulling-the-trigger (i.e., pre-trade routine, research, defined edge, etc.); everything after is uncertain. It’s that piece that’s not fully accepted by the fear-based trader.
So when doubting thoughts grip your mind in the last moments before executing a move, keep a close eye on the the wave of fear; notice it’s deceptive voice reminding you “you don’t have total control...back away.” Take a breath, access courage, the antidote to fear, and rest assured that if you did your homework your prepared for the moment. Now it’s time to be poised to perform what you planned and let go into the opportunity flow.
~Your EKT Coaches
at 8:42 AM