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