How to strictly remember/follow through trading strategy/psychology and risk management

Like everyone, I struggle with trading psychology and risk management. I decided to solve it by writing my notes in a text file.

I basically wrote about different scenarios such that if X happens, I will do Y.

But what messed up is that I still miss them on daily basis. Sometimes I forget what I note. Other times, I get greedy or panicky. I even write a trading journal and mention all my blunders there every day, but I still repeat them.

I can give some example where I missed up.

  1. Yesterday I could have got 25% more gains if I had stuck to my strategy instead of exiting at a small sign of reversal.

  2. Today my investment went down by 7%, which is big for the Options position. All I could do was panic and think about what to do. I had a rule written saying “I exit the market for a day if I had X amount of capital loss, which I completely forgot”.

  3. There was also another mental rule which I forgot to write. I forgot to execute it too. It said, if the stock falls by x% below the previous closing price, I should exit. But all I kept thinking about was what to do, and didn’t do anything because I couldn’t remember what I wrote in my notes.

I basically froze and panicked the whole day today losing 7% instead of exiting at 2.5% loss today. It all makes sense now to me, and now I am wondering why I didn’t do it, but earlier my brain just shut down.

So, please tell me suggestions on how to strictly follow through with strategy and risk management without shutting off my brain with emotions. How do you do it?

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Really wish to make a perfect answer but this guy’s post here makes it relevant, than my would be answers.

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1.) If you keep forgetting your rules then one of the options is to ‘Convert your strategy in an Algorithmic form and do Algo trading’. There are platforms like Tradetron/Algomojo to automatically fire orders.
(But the strategy should be thoroughly backtested upto last 10 years at least before proceeding. Backtesting can be done on Streak/Kuants, there are other platforms also).

2.) The other option is to forget returns and just do practice for 6 months with 1 lot only and keep practicing until the strategy is absorbed in your heart, mind and soul.

  1. I am not confident about converting my strategy to algo trading. My strategy is evolving, and I doubt it’s ready for automation.

  2. I think I can try keeping the position size smaller from now on.

You can use Sentinel or Streak to alert and send your pre-filled orders in one click based on your rules.
Disclaimer: Not promoting Zerodha products, but giving you ways to streamline your process.