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Chapter 9. Trading Inside the 24-Hour Storm > Defining Your Trading Strategy

Defining Your Trading Strategy

Every trade should be part of a thought-out strategy. A strategy gives you the discipline to ride winners and cut losers and even adjust to an unforeseen event. Only expert, seasoned trading veterans should trade on a “feeling.” At that point most would tell you they have identified a unique strategy that works. Otherwise, “feelings” are often just personal biases that cloud the decision-making process.

The best traders always write out their trading strategy before they enter any market. This prevents them from searching for trades or rationalizing a trade by analyzing previously unrelated data. Objective analyses must be done before the trade is entered into the market. Once the trade is placed, the trader has a vested interest in the outcome, and this affects the decision-making process. In the worst case, this vested interest blinds the trader when the environment turns against him.


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