Rules for Controlling Emotions in your Trading.
Hi guys, recently I have had trouble controlling my emotions while trading and lost all of my profits due to error in judgement. I become overconfident or trade higher volumes to cover my losses so I made myself a set of rules to control my emotions. I would like to know what you think about them, and would appreciate any advice you can give. I have read the other topics concerning this on this forum and think I learned abit from it. Keep in mind that I do scalping.<br />
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1. When I start trading I decide on how much I want to win and how much I am willing to loose in terms of pips. When I reach my goal or I loose too much I will stop trading for at least a couple of hours.<br />
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2. I will make all my trades with the same lot size, regardless of how strong I feel the signal is. Instead I will keep the trade open longer if I feel I can win more.<br />
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3. I will alway put a top loss 5 pips under my entry point.<br />
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4. After 3 of my trades in a row result in losses I will stop trading for at least 4 bars on the 15min chart (1h) and just keep on watching the market and try to figure out why I predicted it wrong.<br />
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5. I will keep track of how long I trade and won't continue to trade more than 2 hours without taking at least a 15min break.<br />
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6. When I can't concentrate enough to just watch market movement for 5 minutes and not do anything else I will close the terminal and return at another time when I will be concentrated only on trading.<br />
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Please feel free to add any advice or comments and thanks for your help <img src="images/smilies/good.gif" border="0" alt="" title="Good" smilieid="139" class="inlineimg" />