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There’s something I’ve been wrestling with lately, and I know I’m not alone in this so I figured it would be a great topic to discuss here…
Even with a solid trading plan in place — clear entry and exit rules, proper risk management, the whole nine yards — I still find myself sabotaging my own results sometimes.
It’s not because the strategies don’t work. It’s because I keep making the same two mistakes that turn winning trades into mediocre ones, or transform profitable systems into emotional roller coasters.
And if you’re anything like me, you’re probably doing at least one of these right now.
The Problem With Checking In too Much
I’m at a computer all day watching the markets, so of course I check in on my positions constantly. It’s my biggest struggle as a trader. But here’s what I’ve learned: When you check in over and over again, your emotions get tied to the trade. When that happens, you’ll probably either take losses early or book profits too soon.
And once emotions are involved, you’re done. You’ll either take losses early on trades that would have been winners, or you’ll take profits too early and cut yourself short.
I had a recent example with SanDisk during a memory stock sell-off. The setup was solid. I had my plan. But because I kept monitoring it, my emotions overrode my system. I left twice as much on the table — we’re talking $60,000, $70,000, maybe $80,000 — because I cut my profits early instead of sticking to my original exit target.
The best thing you can do is place the trade, let your rules take care of it and not check in. When you have a system in place that gives you blanket rules to follow no matter how you feel, it becomes much easier to trade with discipline.
The Gut-Check Test for Position Sizing
The second mistake? Over-allocation. You put so much money into a trade that you’re now so afraid of it losing that you can’t stick to your plan.
Here’s the simple test I use: Imagine the position you just put on went to $0 today. All of it. Gone. Imagine today it went to $0 and you lost it all. Does that leave you feeling uncomfortable?
Does that make your stomach queasy? Or can you say that’s alright, we’ll get it the next time around?
For each person, that’s a different number. For some, losing $100 might feel terrible. For others, it’s no big deal. The number doesn’t matter — the emotional response does.
If you’re feeling queasy, you’re over-allocating. And when you over-allocate, you’re going to get your emotions involved. You’ll cut profits early and take losers too quickly. I’ve done it myself. I once took an $80,000 loss on one trade because I over-allocated and was too scared of what might happen next to follow my plan.
Both of these mistakes share the same root cause: letting emotions override systematic planning. You can have the best backtested strategy in the world, but if you’re constantly checking in or risking amounts that make you uncomfortable, you’re destroying your edge.
The fix isn’t complicated. Size your positions so you can sleep at night. Build your plan with clear rules. Then trust the process and step away.
It’s not sexy. It’s not exciting. But it’s what separates traders who survive from those who don’t.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
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