By Admiral Markets

Dear Traders,

Preparing and implementing a
trading plan is critical when formulating a consistent approach.

The trading plan helps traders reduce emotional reactions to price volatility.

However, most traders notice a gap between theoretical trading and
actual trading.

Trade ideas may seem simple on paper but the situation can quickly become complicated when a final decision is needed.

Nenad and I discuss this and more in the free course called
Zero to Hero, the latest of our efforts to educate the traders.

Short trading phrases help

Traders have little time to react when the markets are in full motion.

Often traders feel that a quick decision is needed, because otherwise they might miss a trading opportunity.

Does this sound familiar?

Do you remember moments when it seemed like
now or never?

Don’t be alarmed – this is a common reaction for almost all traders.

Traders tend to make impulsive, reactionary decisions when the pressure is high.

You can fight against this urge by following these steps:

1. recognise when internal pressure is forcing us to make a trade decision
2. use short slogans to help remember the best action as a rule of thumb
3. practice, check and know your trade plan.

For now, let’s focus on the second point.

In this article, we’ll discuss several slogans you can use when scanning the markets.

Let it center before you enter

Traders have the urge to enter the market immediately once a trade opportunity is spotted.

In most cases, however, price tends to retrace and correct before momentum really pushes price up or down.

As a trading friend of mine always used to say, there’s no such thing as an emergency when trading the markets.

He meant to say that we should take our time evaluating the setup, plan and entry before entering a trade without proper preparation.

Don’t jump the gun or chase the market

Jumping the gun occurs when traders enter the market before a signal arrives on their chart.

Here’s how:

…in a trader’s mind, when a signal seems to be near (a candle is almost breaking)…

…the trader loses patience and tries to beat the market by making an early entry.

The problem is, you enter the market but the signal never appears.

It’s tempting to ‘push the button’ and enter the setup earlier than planned.

However, traders need the discipline to wait for the actual signal to appear on the chart.

Remember to always wait for your trading plan to materialise and never assume something is bound to happen.

The market acts independently.

It follows the
path of least resistance but not your vision of how price should move.

That same goes for entering the market too late, i.e. chasing the market.

Once the setup is gone, don’t justify a late entry and just let it go.

The market will always be there

Once you
do miss a setup, remember that the market will not suddenly disappear.

Yes, you may have missed out on some opportunities…

…but new opportunities will definitely arrive in their place.

It is way more beneficial to keep focused on potential new setups rather than get distracted by the past.

Or in other words, better money missed than money lost.

Find a wide open space

When analysing the markets, it’s always beneficial to remember that not all setups are worth the trouble.

There is a maximum number of daily decisions our brain can handle before it experiences decision fatigue.

Traders need to scan the charts and focus on the financial instrument with the best potential for the day, week or month.

What do I consider the best potential when analysing the charts?

I prefer to avoid trading in large congestions and focus on trading the momentum in wide open spaces.

Most often, this occurs when there are less support and resistance levels standing in the way, which is what I call
space…

My motto is, “let the
market lead and I will follow”.

Other traders say something similar: “the markets speak and traders listen.”

We control nothing but risk

As explained earlier, traders need to be flexible in their approach to the market.

At all times, you should avoid ‘hoping’ that the market will go in your direction.

Why?

Traders cannot control price movements and hence all setups are probabilities.

The only part traders
can control is the risk taken per setup, day, week, month and quarter.

Plan the trade, trade the plan

Ultimately, the entire article can be summed up as this simple message: plan the trade and trade the plan.

It sounds doable, but it takes time to master
both parts of the approach.

Do you have any quick reminders that
keep your mind on the right track?

Let us know in the comments.

If you want to learn more about trading plans, systems, indicators and much more, check out
Zero to Hero.

You can also consult our free articles to help you on your way up.

Cheers and safe trading,

Chris

Article by Admiral Markets

Source: Learn how simple slogans help your trading

Admiral Markets is a leading online provider, offering trading with Forex and CFDs on stocks, indices, precious metals and energy.