Besides money, what’s on the line when you enter a trade?
1 Which of my trading plans am I applying to this potential trade?
2 Why does this potential trade match my trading plan rules or criteria?
3 What % of my trading bank am I applying to this trade?
4 Am I going to apply leverage to this trade? If so, how much leverage?
5 What is the range of profit I expect from this trade?
6 What is the timeframe of this trade plan? (1 hr, 4 hrs, 1 day, interday?)
7 How many minutes, hours, days do I expect a decisive outcome to this trade (entry, management, exit)
8 At what price am I going to enter the trade, and at what price am I going to exit the trade?
9 At what frequency will I revisit the potential set up? Minutes to days?
10 Can I schedule the trade automatically, or can I fit this into a time of day that I know I am free to concentrate only on trading (eg. am I at work or at home?)
If your place of residence is on the line, you’re doing it wrong.
@eleanorkim What do you mean by ¨what’s on the line?¨ Are you referring to over-trading?
A simple check is to consider the srengths of the currencies in the pair you’re targeting for a trade. For example, if I’ve got a signal to go long on AUD/JPY but all the other 6 significant JPY pairs are bearish, and AUD is bearish in its 6 other signficant pairs, I would be very suspicious about my trade decision - would I really want to be buying AUD when everyone else is selling it, and do I want to sell JPY when everyone else is buying it?
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