Does it ever happen to you that you entered the trade without following the trading plan but simply because the price of an instrument suddenly skyrocketed and you were itching to snatch the profit no matter what?
Or here’s another scenario. You are scolding yourself for making a losing trade while sticking to your trading plan while desperately looking for possible flaws in your strategies to make it absolutely perfect. Sound familiar?
Alexander Gerchik cannot afford trading recklessly without an everyday trading plan. He also doesn’t treat losing trades as a complete and utter disaster.
Alexander Gerchik believes that one of the biggest mistakes traders make is treating losing trades as terrible trades, although even the coolest traders do mistakes every now and again.
The statistic which includes 50% of profitable trades is considered solid. But in order to reach 70% of winning trades, you need to continuously improve your strategy and trading plan.
So, in essence, there’s no such thing as a good or a bad trade. There are simply trades that are made according to the specific scenario and those that violate it. This very scenario forms the backbone of the trading strategy’s success.
When the market opens, you don’t have much time for decision-making. If you are going to trade without doing proper homework and using a trading plan (example of Gerchik’s trading plan is given in the article), it will be very tough for you. Why? That’s because the human factor will eventually affect you.
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During every webinar, Alexander Gerchik says that he doesn’t enter the market without an elaborate trading plan. Risk Manager solution helps you to eliminate a human factor and not get lost in a whirlwind of your thoughts when the market offers an entry.
Alexander Gerchik shares how he preps for the trading day. Watch the webinar at the end of this article and see it for yourself.
1. Create a file and write down scenarios for long and short trades (separately).
2. Analyze instruments. In order for the assets to be included in this list (your homework list), you need to carefully examine them.
What To Know!
Alexander Gerchik chooses instruments that provide him with a clear picture of what’s happening in the market and the precise direction of the price movement.
3. Evaluate the potential of each instrument.
The evaluation plan looks as follows:
4. Fill out the table in accordance with your goals.
With a list of scenarios for each asset in front of you, you will be able to trade in a logical and unbiased manner. By doing homework, you will be able to avoid the human factor which pushes you to overstay positions or trying to catch up.
They forget to analyze the performance of a particular scenario. Trading plan and trading journal are the go-to tools for successful trading. All trades, both losing and winning ones, need to be analyzed. Why? Because analysis is the one thing that can actually reveal whether or not your scenario works.
If the direction of the price for 70–80% of instruments was indicated correctly, you can safely trade this scenario. If not, it’s time to rethink your strategy.
“Create a file named “My Perfect Trade.” When you see that the deal you made was actually perfect, you will understand what and how should be done to achieve that again and again.
Watch Alexander Gerchik’s webinar to learn more about rules for doing trading homework.