Why Are You In A Trade?

You need to always be asking your self that IMPORTANT Question. Why did you enter a trade? What was the setup? What was the time frame? Was it a Holy Grail(HG) setup? Was it a momentum trade? Was it a reversal? Was a bull flag breakout?
There are a million reasons why you enter a trade BUT when do you get out if the trade starts to poop out???? That's the question that will determine your survival as a trader. When should i bail?


My answer is: every trade stands on it's own merit. If i enter a trade because of the HG setups, then i need to exit on HG failure. If i enter on momentum(momo), then i exit on momo deterioration. if i enter on reversal, then i need to exit on reversal failure. If you entered a trade on the 5 min charts and the trade is not working, do not manage it using the 60 min. time frame. if you enter using the 5 min time frames, then you need to exit using the 5 min charts. NO ifs, ands, or buts!

Do not make excuses for the trade that is not working. It is not working because the market is not aligning with your thought process, that's all and it's that simple. Don't over think it. Cut it loose and move to cash where you cannot be wrong and can think more clearly.