Do you ever find yourself long a trade that you should really be shorting?
Do you trust your gut? Or ignore it because you couldn’t possibly be wrong?
Throughout my career as a trader, I’ve made plenty of mistakes by ignoring my gut.
Sometimes I realized that not only should I not be in the trade, but I should be on the opposite side of it — like shorting a stock I’m currently long or vice versa.
The best thing to do in situations like this is to just admit you made a mistake. There’s no room for ego in trading — it’s okay to be wrong. What matters more is what you do next…
My advice is to pivot. Never be afraid of switching the directions of a trade if there’s a valid technical or fundamental reason to do so.
It might not be easy to pull a 180 on a trade at first, but as you gain experience as a trader, the easier it becomes to trust your instincts.
However, and I repeat this, make sure there’s a valid trading reason to reverse course (or enter and exit any trade for that matter). In my experience, you should feel comfortable as soon as you enter a trade if it’s the right one to make.
Of course, that’s no guarantee that any specific trade will work, but you should make money over the long-term.
Trading is technical, mathematical and statistical — but there’s a third element that involves how you feel about a trade. That’s the art in trading, it’s not 100% science.
And once you recognize and trust your trading instincts, you’ll be better for it.
P.S. The new year starts soon. Do you have a 2020 resolution yet?
Roger Scott has one, and it’s to double his entire trading portfolio.
He’s spent the past few months putting together a comprehensive trading blueprint to help him achieve his ambitious goal.
It takes into consideration all the possible twists and turns the market could take over the next 12 months and how maximize his returns under all conditions.
This article is supplied courtesy of Bookerwealth.