Today I want to talk about something we often go through during our day to day trading journey – the ‘should have’ or ‘could have’ syndrome.
To illustrate what I am talking about I want to draw your attention to my post from about 4 weeks ago on 28th of August. I presented a trade idea around 10:40 UK time which was as follows:
|Market||Direction||Entry||S/L||Move to B/E @||Target 1||Target 2|
|GBP-USD||Long||1.5440||1.5415(25 pips)||1.5460(20 pips)||1.5490(50 pips)||1.5590(150 pips)|
At 13:50 the same day I posted an update that my trade got triggered and first target was met leaving the second half of my position for the second target. The second target was also eventually met.
Today when I look back at the charts I wonder if I was too quick in booking those profits. The market has gone up to 1.6160’s after recent FOMC – a whopping 600 pips, without ever coming to my entry since. There was an element of ‘Oh I should have held that trade’ self talk going in my mind.
This is the sort of hind sight thinking that forces traders to deviate from their trading plan and strategy. And they end up making costly mistakes. It’s only human to think like that – and if we didn’t have these emotions, we will all be perfect and stretching the argument, perhaps there will be no markets. Human emotions have a big part to play in the very existence of the markets.
Those who deviate from their plans often end up making a mess of their trading and their accounts. So my strong recommendation is stick to your plans.
Next time you catch yourself saying ‘should have..’, ‘could have..’, watch out and go back to your trading plan and stick to it. To end I am tempted to quote a much over used cliché – plan your trade and trade your plan!