I remember as a young kid learning to fly private planes my flight instructor said to me “Mike, when you get in the airplane and put your safety belt on, remember that you are strapping the airplane on to you. You are not strapping into the airplane.”
Interesting, I thought, but he made a very good point. The difference is if you strap the airplane on to you you’re in control, not the airplane.
Similarly, when we trade “we must be in control” That is to say that each and every time we place a trade we must know where to get into the trade and where to get out of the trade, and also know how much money can the trade produce if it reaches it’s target, and exactly how much money can I lose if I get stopped out.
My trading mantra: Plan your trade and trade your plan.
This is the trader’s mantra “plan your trade and trade your plan.” Now armed with this information we go into the trade with confidence that we have done what’s necessary to protect our account to trade another day.