Before you consider entering into trading, you should have a game plan. The game plan tells you how you will manage this transaction, it will benefit you, or it will bring losses. It’s easy to enter the transaction, and you can determine whether it is a profit or a loss when you leave the transaction.

Two traders, Zhang San and Li Si, may have made the same trade, but the results are very different. Zhang San benefited from the transaction because Zhang San managed his transaction properly and planned his exit methods in different situations. If there is a loss, he knows when to stop the loss and leave the market with a smaller loss. And Li Si had no plans. He didn’t know what he should do when the price was very bad for him, and eventually lost all the funds in the account.

It is very important to determine how you will trade before entering the trade. You don’t want to make important decisions during a fierce battle.

When you enter the transaction, you should have already figured out how to deal with possible outcomes.

Each.

may.

result.

Try to consider every possible variable and decide in advance what you want to do. During the transaction, you want to become a cold-blooded and ruthless execution machine.
All decisions are made before the transaction. You are forward-looking. This means you have not yet entered the transaction! When you enter the transaction, you just have to look at what you wrote down. This precludes all decisions made by intuition.

If you start trading, you already know where your initial stop loss should be set, what your goal is, whether you want to try to change the stop loss, when you should leave the transaction early, etc.

Suppose you encounter a surprise test in a transaction, and you are asked, “What should you do if the price changes in this way?” You need to be able to answer this question immediately without thinking, in every transaction.

Your trading management rules must be formulated in advance, and you must have them before the start of the transaction.

In trading, you never want to think “what am I doing now?”

Decisions on these matters must be made before the transaction.