They key is how we handle and react to an unpleasant variable.
For instance, having your connection or system go down while trading at the office or from home is something that can happen. You’d like to think it never will, but even the best networks suffer an outage at some point. Unfortunately this happens without warning and it takes a little bit of time to be informed what the issue is and why it’s occurring. Something like this usually gets fixed in minutes, but that can feel like an eternity if you have open positions.
OK – so now what? Your system just came back online and you have been freaking out the past few minutes.
First – take a deep breath and make sure your head is right so you don’t make any dumb decisions, i.e. a decision that breaks the rules of your trading plan. I mention this because some traders lose their heads when something like this happens and it doesn’t help the cause at all.
You need to be focused the moment you get back online and ready to act.
Look at your position monitor and decide which position needs attention first.
Now here’s the key. You must act according to your trading plan regardless of where the position is. If a stock is below your stop loss price, well, suck it up and eat the larger loss. What’s that? You want to trade around it and try to get out at a better price. Ok, good luck maybe it works out on that position, but it won’t on the majority of them, plus it’s time wasted that could have been spent attending to your remaining positions.
On the flipside if any positions hit or surpassed your profit target it’s time to close them out and book it. Consider the extra profit a gift. This one I almost don’t need to mention as no one has a problem taking a profit.
In the end, once you have evaluated where your positions stand, then making the necessary decisions based on your trading plan should be automatic. If not, then your trading plan still needs work to be complete.
To build out a rock solid trading plan take part in the Active Trading Blueprint. You will be taken step by step through each key point that makes up a complete trading plan along with tutorials and real life trading examples.