It’s easy to follow a trading plan when the price action is moving our way. We feel like geniuses.

Look at me! I’m so smart! The stock market is doing exactly what I planned for it to do! Let’s go car shopping!

But how do I feel if the price action goes the other way?

Assuming I’ve put a trading plan together that accounts for both the possibility of being right AND the possibility of being wrong, why should I feel any different when the price goes the wrong way?

What’s the point of putting together a detailed trading plan if I later exit the position following the first price move in the opposite direction I hoped for?

Why go through all that effort? [Read more…]