Follow the Map!

There have been a couple of times recently where I have had a signal to exit one of the asset classes and have ignored it, thinking that the signal would be reversed the following week. While this is good if I am correct, the problem if I am incorrect in my predictions is that I then have to exit at a lower price, either reducing my profit (if I have any) or increasing my losses. It might be tempting also to stay in the trade, hoping for a reversal over a few weeks while a price moved against me.

It might be the case that it is more important to exit a position at the first signal when it is a 'sell' signal than when it is a 'buy' signal, because prices tend to fall faster than they rise.

It is also the case for me that if I do not follow a signal when it arises, I tend to look at the trade multiple times during the working week, and my trading then occupies a greater part of my thinking than it should.

Have a look at this weeks videos and look for the signals that I acted upon a little later than I should have done!

So, my takeaway lesson to myself this week is: 'act on the trading signals fully and completely on the first day of trading after a signal arises, do not watch the trade'. It's simple, in theory, but quite difficult emotionally, in practice!