Why Can't You Just Stick to the Plan? Breaking Trading Rules 🤔

In this video, guys, we are going to look at why we struggle so much to stick to our trading rules. Stick around.

Hey traders, warm welcome to you. All right, so you know what it's like in the heat at the moment. You've got all these rules out, you've got all these things layered down, you've got post it notes perhaps, you've got all this, you've got a laminated sheet like, right, I'm not going to break this risk rule. I'm only going to trade this size. I'm only going to trade this setup. I'm only going to lose this much maximum per day. I'm going to stop after two loos or all these kind of good intentions that you have. You spend all that time cultivating, you learn all this stuff, you go, yeah, that's great if I did that. And then the heat of the moment, you just overrule everything. You just seem to do what you want to do, you just become unruly and you just start breaking rules and that just annoys you even more. And you break more rules and you break more rules and we all know how that ends. So either comes to a point where you go, what have I done? Let me stop. Or it's you recover and, and you go, ah, got away with that, got away with that. And all you're doing is cementing that bad behavior if you like. So why do we struggle so much to stick to our trading rules, guys? It just comes down really to emotion. Now I don't want to stand here and say we need to trade without emotion because it's not possible. We are human beings. We experience emotion all day, every day. That's part of the human experience. Negative emotions, positive emotions. How we manage them is the key to successful trading. Well, not the key to successful trading. We also need strategy at the same time, but it's the key to be able to stick to our rules. Okay? Because we all experience frustration, fear, potentially depending on what position you're trading and how long you've been trading, anger, euphoria, all this array of stuff. But how we respond to them is key. Because the trouble we have is that when we're kind of learning trading, we have nothing really to work on. No confidence as such, no history of success to build on, then a lot of these emotions are magnified. You know, if you imagine you're trading this, and let's say you buy here at double bottom, right at that point in time you're thinking, oh, I could get stopped out here. There's fear you're thinking, what if I lose this trade? I don't want to lose this trade. And you know that. Actually, you know, when the market was closed, you were saying, yeah, I'll take it that level because it's a great level. It's rotating back all the good reasons why to take it. But in the heat of the moment, there's a flash of fear. A flash of fear comes over you and that starts to leak into your actions because then you might hesitate a bit. You might trade less size than you want, you might do this, you might not execute it, when in reality, all you want to do is execute that trade. So this is an emotion, fear, the example here, right? Just literally pulling the trigger. And at that point, you've got to say, right, I acknowledge it, but I'm just going to respond in the way that I said I was going to respond. This will take time, but if you just try and say, I'm not, I'm not. I'm not even thinking about it. I'm just gonna pull the trigger. Pull the trigger. That's dangerous. Because I think the emotion needs to be acknowledged. You need to be acknowledged the fact that you are frightened of loss and being okay with that, because that will over time, the more you acknowledge it and the more you carry on regardless, and the more you say, okay, I've acknowledged that. However, I'm still going to behave in this manner. It doesn't feel like. You don't feel like you're just pushing all this stuff under the rug to worry about all the time. You're dealing with it, but just becoming better and the market goes in your favor. You get a bit of euphoria, a bit of excitement. Number two. Then it comes down, you're like, oh, I'm losing my profits again. Is this. And then we get this roller coaster of kind of happy to sad to happy to sad. And it might not be that extreme. The trouble is, you know, when we are positioned, when our position size is increased, it is more extreme. It's like, wow, up a lot, down a lot. Up a lot, down a lot. That's why I say, definitely recommend, don't trade in your P. L. That's another topic completely. Otherwise, trading, looking at your P. L. The point of this video, guys, is, hey, it's that emotion that we see and we feel. That's why we struggle to stick to our trading rules. It's not because of any other reason other than we're just feeling something in the heat of the moment that is overruling the conduct we have and the conduct we said we're going to have, you know, and acknowledging that feeling, whichever it is, and saying, hey, this is why I am starting to think differently, because I'm quite excited that the price is going in my favor quickly, or I'm quite nervous that the price has gone my favor and come back halfway, or I'm quite this or I'm quite that, taking the time, just that little bit in the middle between the emotion and the reaction and just acknowledging it. However you acknowledge it, then write it down. Just talking to yourself and you're saying, hey, I'm feeling this. If you. Is there any reason to be feeling this? Or is that just because I've got money on the line and it's important to me to succeed in trading all these other things and just sort of talking yourself through it as if you were talking to a business partner or employer or employee even, just stuff like that, and say, okay, this is the way I'm feeling and almost being at peace with the fact that, hey, yes, maybe you are frightened. A little bit of a frightened might be extreme word, but you're concerned and a bit frustrated that price has come back and you're worried about losing more money. We're worried about it going into red, but acknowledging and then saying to yourself, okay, but how am I planning to react to this? I don't want to allow that to cloud my judgment now. And just a little bit of friction in the middle where you just take a step back and acknowledge that emotion before taking the next step can just be the difference between that instant, I'm going to do this, I'm frightened, I'm going to take profits or I'm going to come out, I'm going to double up, I'm going to do this and do that. That instant stuff that gets you into trouble all the time in trading, just that little second of time of saying, right, if I just get a process in my mind that when I feel the urge to do something, I acknowledge where that urge is coming from. And then I look at it, I just examine it, I say, right, is there any credibility to it? Not really. Hey, let me just carry on. And just that little bit sometimes is enough to help you stick to the rules. And just acknowledging it, understanding it, I think is key, guys. So watch out for that emotion happens in trading. It's because we have money on the line. And it's also because it's probably something you really want to get good at and you've been doing it a while and you Kind of spinning your wheels and all this other stuff. So there's going to be, you know, emotion attached to each individual train. It's hard. It's easier said than done. Say, okay, well, you know, take your emotion out of it. But, you know, as you get more experience, you get better at managing that. You get better at saying, okay, I'm recognizing that I'm frustrated about this. I'm recognizing. I think I'm a bit of a trading God here. And you start to make small adjustments to make sure that talking about emotional thermometer is sitting right in that sweet spot. You're not too hot, you're not too elevated. It's not too relaxed. So it's just that centered sweet spot. So the more you get to experience this, this is just a learning curve. It's like, okay, I'm experiencing. I've never experienced this frustration. I've never experienced this euphoria. Okay, what does it mean? Does it mean I have to do something? By the way, the science behind this guys waffling on a little bit on that point, but hopefully you get it. The science behind this. Definitely don't claim to be a scientist, is that you use a different part of the brain when you're under different emotion. We have different emotions. So when you're just thinking clearly without. Without any particular emotion, using a specific part of your brain, and that's the same type of the brain when you're writing down your rules and you're planning your trades. However, when you get excited, you get frustrated, get angry, the blood flows to a different part of the brain. Did experiment this, but someone in MRI scanner specifically for trading. But the point is, we still experience that. So when it's fear, when it's fight or flight, when it's this or that, same type of motion should have trade. We use a different part of our brains to make the decision. And so that's why we end up behaving. And we look back at the end of the day and go, why did I even do that? I don't even know why I did that. It wasn't in my plan. I just don't know. Because we're using a different part of the brain. If we recognize we're in that emotion, then we can analyze it, assess it, hopefully bring it back to center before we take the action. And then we're using the part of the brain that is the topic part of the brain that we want to nurture and we want to build. And the stuff that we're working on when the markets close. Anyway, guys. Hope that's helped why we struggle so much to stick to our trading rules. Let me know what helped you stick to your trading rules. Thanks for your comments, shares, likes, etc. I appreciate your support. Take care. Bye Bye.