Almost all businesses have some kind of business plans. It keeps everyone focused on what need to be one to achieve the business objectives.
My approach to trading is also business-like. I normally have a plan on how I would manage the trade that I'm about to enter. There is some flexibility involved as the trade progresses (such as trailing my stops), but the main framework remains unchanged thruout the duration of the trade.
Sometimes however, I do jump off the wagon. When this happens, the market usually punishes me when I do not follow my own plans.
This happened on my recent EUR.YEN trade a couple of post ago. I had my reasons, but the market couldn't care less.
As I said before, I ignored my own plans. Once this happened, price took a different course from the ones that I had analyzed prior to taking the trade.
As a result, I became a headless chicken - not knowing what I should be doing next. At this stage, I was trading based on hope.
I usually learnt a lot more from failed trades than the ones that banked in the money.
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