A list of questions that you should answer to before taking a decision whether to trade or not
If you feel that a particular question will not be relevant and useful for you, just remove it and add your own, if necessary. Or choose only one or two that match to you and make them part of your everyday routine.
1. Using the scale from 1 to 10, with 1 being the most hideous and 10 – the most healthy and vigorous condition, answer the question: How do I feel today?
Any score below 6 can be classified as inappropriate.
2. Is there something on my mind that made me feel stressed out, angry, panicked, or guilty to the point that I cannot get it out of your head?
3. Did I just gain a big profit on the market? One that will send me to the top of happiness? Is there any possibility or danger of losing after very strong positive emotion?
4. Did I endure a general loss on the market, which seriously harmed me? (If the answer is yes, ask yourself: Did I follow my rules? What conclusion can I do?).
5. Perhaps I won without following my own rules? (If it is so, then either change the rules or accept that profit as a mistake and do not repeat this behavior again).
6. Has an important event happened in my life recently – positive or negative? (If the answer is yes, how does it reflect on my energy and emotions? Leave the market if your behavior is different from normal).
7. Did I endure a series of losses? (In this case, take your time to review your trading plan and to report changes in the market).
8. Did I turn aside from my routine actions today? These could be things like: you missed your morning exercises, you didn’t eat normally, you had too much alcohol last night, you didn’t sleep well, etc. This could be a sign to stay away from the market today.
9. Would I be able to concentrate on playing chess (or on your favorite game for strategy and concentration) and to defeat opponents as good as me? If not – then you are not ready to fight with the big fish on the market today.
10. Did I wake up with the feeling that I need more sleep? If you have a good breakfast in the morning, physical exercises and relaxation, then you will leave home full of energy and good mood. You have to answer the question whether to risk your money as you go out exhausted or not.
11. The time now is 11:00 am or 2:00 pm. Have you got the need to close your eyes for a minute? If the answer is yes, then you should not trade. Hours between the early noon and 15:00 are defined as those when the body needs to rest and if you do not feel well physically and mentally, it would be better to have a rest for a while.
An important note! If during the day, something happens that could send you to the negative side of the issues above, then you should leave the market immediately, rather to stay until the end of the day.