I recently came across a printout from an article related to Psychology.
2 of the bullet-points on the printout were:
- I continue to educate myself on how markets work
- I continue to educate myself on how the mind works so that I incur the necessary discipline to execute the right actions for my success
Here is an example of where looking just a little longer at the chart before placing a stop loss order would completely turn things around. The stop needed to be a bit lower than where is was, clearing the area where the middle band ended up. We needed a better candle to use, and it was available.
The price went two times past where the take profit was.
I’m simplifying this a bit. Sometimes we are stingy with our stop losses, they need some technically justified room. Sometimes we are too liberal with them when there is a meaningful level closer to the entry.
We need to follow the two bullet-points.