Some of my better trades lately seem to occur after a string of marginal trades which either stop out or seriously underperform.
Mostly because of my rule which says that after two poor trades I need to step aside, clear my mind and reassess the situation.
Time out!
Reassess!
It prevents a downward spiral of emotional revenge trading.
And allows me to return to the market with a new plan. Usually, a plan which waits for a change of structure and takes the first pullback opportunity within that new market regime.
So this brings me to an idea that may help me cut out some of the more marginal trades.
And perhaps may help you with improving your trade quality as well.
Rather than waiting for two marginal trades to place me in drawdown, maybe I could trade “AS IF” I were already in that situation.
Prior to entry, ask:
- “Is this a trade I would take if I were in drawdown?”
If so, go for it.
But if not, maybe pause and reassess.
Sometimes it will keep you out of a winner. That’s how this game of probabilities works.
But if it’s keeping you out of a number of marginal trades then there could well be a positive change to your edge.
If the idea appeals to you, give it a try. But track the impact it has on your edge over a series of “avoided trades”.
Prior to entry, ask:
- “Is this a trade I would take if I were in drawdown?”
Happy trading,
Lance Beggs