Home Trading Strategies Should Gut Feelings Play A Part In Your Trading?

Should Gut Feelings Play A Part In Your Trading?

5
0
Should Gut Feelings Play A Part In Your Trading?

Hey hey what’s up my friend so welcome back to today’s episode where I’ll be discussing right should you follow your gut feeling in trading okay so let me explain what I mean by this right so there are numerous scenarios to this first scenario for example right you see the market breaks out oh the price is so bullish don’t look at a huge momentum look at the range of the candle and so huge you’re right the price is going to the moon right let me buy right now and then you look at your trading plan uh well the trading plan didn’t say buy right now because it’s not according to the rules but but come on man look at the chance man it’s so bullish right and that’s what your gut feeling tells you to buy right even though the trading plan says a well not quite so that’s the first scenario or another scenario could be you know you enter a trade right you you bind a breakout price goes in your favor then it starts to stall the price you know someone stalls down there I just do this some mysterious mysterious force right trying to push the price down then a price slowly reverse and starts moving against you now at this point on is coming close to your entry price and you have seen right that you’re open profits have a price so you have this gut feeling man as you just quickly exit this trade a break-even right just you know don’t take that don’t don’t see this winning trick become a loser just you know exit the trade a break-even and you know call it a trade right so to protect your downside right and let’s a gut feeling telling you right now there’s no reason to let the trade hit your stop-loss and you know you want to exit the trade early ahead of time even though your trading plan you know didn’t say it’s time to exit that’s another common scenario so another question is right after you know describing those two couple of scenarios the question is should you follow your gut feeling and my answer to you is no right you shouldn’t follow your gut feeling and there are a few reasons for this right here’s the thing right 95% of traders out there are losers and trust me when you have those kind of gut feelings examples that I just share with you guess what those are the same feelings that 95% of traders feel as well exact same feelings and 95% of traders are losers so if you want to follow your gut feeling right there’s a good chance that you’re gonna end up like one of those traders follows their gut feeling and lose money consistently okay and the second reason for me saying no you’d want to follow your gut feeling is because when you follow your gut feeling you are making your actions inconsistent and when you get an inconsistent set of actions guess what they will lead to an inconsistent set of results so if you can follow your gut feeling if you’re going to you know break your rules not follow your trading plan and what’s the point of you know trying to be discipline what’s the point of developing your trading plan what’s the point of you know setting rules for yourself when you’re gonna break it doesn’t make sense so my honest and straightforward answer now to you is that no gut feeling shouldn’t play a part in your trading even though you’re a discretionary trader now it is fine at this point I some of you might might think that you are the exception or you have that special gut feeling that you know somehow always seems to be more right than wrong and hey you know if that’s the case then here’s a very simple thing that you can do it to validate whether your gut feeling actually makes you more money in the long run or not here’s what I want you to do right I assume we have a trading journal okay if a trading journal then here’s what I want you to do every time you put on a trade and if it’s a trade right there you do not follow the rules you follow your gut feeling right put it down right so beside a tree you can see something like no follow gut feeling okay then write down the results of that tree when you follow your gut feeling is it a winner is it a loser right what’s the profit on the trade what is the risk to reward on the trade do you like you know make a tree our trade or two or whatever just write it down boy was if it’s a loser write it down as well then on the other column right I want you to write on the results right of the trade can you follow your trading plan what is the outcome would have been would it have been a winner or a loser this way when you you know tell me the trades right after looking through a sample size of traits those traits where you follow your gut feeling and those traits where you follow your trading plan which one is more profitable now you have the data to back it up and you will know right objectively right whether your gut feeling actually makes you more money or not and my intuition is telling me that you know I think it’s better to follow your trading plan but again right some of you might think that your gut feeling is accepted then just do this simple exercise so it’s just an additional column right you know for the gut feeling column right you know what is the end result can you follow your gut feeling and the other column is the end result how do you follow your trading plan simple as it is right once you have a sample size of traits compare it and you will know the answer and objective answer okay so with that set up a quick recap right my take is that you shouldn’t allow a gut feeling to play a part in your trading but if you want to to implement it right then let the numbers speak for itself so with that’s it I wish you good luck and good trading I’ll talk to you soon you

LEAVE A REPLY

Please enter your comment!
Please enter your name here