Adrian Reid explains how to turn your emotional reactions to trading signals into testable rules. Identify what chart features trigger fear or excitement, encode them as rules, then backtest to see if those trades beat your system average. This builds confidence and cuts emotion-driven decisions.
When you have a system and it generates a signal and that signal triggers you emotionally, you don't like that signal, what do we do? What's the ideal course of action? Do we skip the signal because we had a reaction to it? Okay, ideally we take it, but does that help us with the emotional problem? We're suppressing the emotion. We're not dealing with it. Right. Ideally, how would we deal with that emotional concern that that trade kicked up? So you look at the chart and say, okay, what about this trade has got my emotion up? What am I scared of? What am I anxious about? What am I excited about? And you find on the chart the characteristics of that trade, and then you turn that into a rule so you can isolate trades like that. Then you add that rule to the system and you back test it to determine analytically, objectively, whether trades like that are good or bad, better or worse than the average your system generates. Is this making sense? Because this is what builds absolute confidence in the rules.
