Psychology and your plan: free trading lesson

Step 1

Fear and greed

Two feelings cause most trading mistakes. Fear makes you take small wins and avoid good trades. Greed makes you take too much risk when things go well. Both feel reasonable in the moment, which is exactly why the plan is written down before the trade, when you are calm.

FEAR MAKES YOU

Close winning trades long before the target. Skip good trades after a loss. Move the stop closer for no reason.

GREED MAKES YOU

Trade a bigger size after a win. Move the target further away. Hold a loser and hope.

Two feelings, the same result: the plan is broken.

Step 2

Revenge trading

After a loss, the strongest urge in trading is to win it back right now, with a bigger size and a weaker setup. That is revenge trading, and it is how a normal $20 day becomes an $80 day. The losses you planned are not the danger. The trade you take because of them is.

TRADE	WHY	RESULT
1	The plan, $10 risk	-$10
2	The plan, $10 risk	-$10
3	Double, to win it back	-$20
4	Double again	-$40
	The day	-$80

Two planned losses cost $20. The urge to win it back cost another $60.

Step 3

Set limits for the day

Taking trades out of boredom, or because the screen is open, is called overtrading. Two limits stop both overtrading and revenge: a maximum number of trades per day, and a daily loss limit in dollars. Reach either one and you close the app until tomorrow. A bad day then stays a small bad day.

3trades a day, at most

-$30daily loss limit

Decide both numbers before the day starts. When one is reached, the day is over.

Step 4

Your trading plan, on one page

A trading plan is everything from this course on one page: what you trade, which charts, which strategy, how much you risk, your daily limits, your news rule and when you review. Read it before every session. If a trade is not in the plan, it is not a trade.

MARKETSGold and EUR/USD only
CHARTSDaily for direction, 4 hour for levels, 1 hour for the trigger
STRATEGYThe written rule from lesson 9
RISK$10 per trade, decided before the entry
DAILY LIMIT3 trades or -$30, whichever comes first, then stop
NEWSNo new trade 30 minutes before and after high-impact news
REVIEWEvery Sunday, read the journal

An example. Yours can be different, but it has to be written.

Step 5

Keep a journal

A trading journal is a simple record of every trade. It turns vague memories (“I always lose on gold”) into facts you can fix. Three moments to write in it:

Before the trade: the market, the reason, entry, stop, target and size.
After it: the result, and one honest line on how you felt and whether you followed the plan.
Every week: read it back. Your biggest losses will almost always be the trades that broke the plan.

Step 6

Start small, then grow

Nobody follows a plan perfectly at first. Make the first mistakes cheap, and only then let them cost more:

Smallest real size: your first 20 to 30 trades with the smallest size your broker allows, following the plan exactly. Real money feels different, and that is the point.
Grow slowly: raise your risk per trade only after many trades that kept the plan, never after one good week.

In AiTradely you set the risk in dollars before every trade and the app works out the size, so starting small is one number, not a calculation.

Watch out. If trading is making you anxious, tired or desperate, stop for the day. No trade is urgent, and the market will still be there tomorrow. If you feel you cannot stop, talk to someone you trust.

	TRADE AND REASON	RESULT
A	Gold buy at a 4h support zone, stop below it, $10 risk	-$10
B	EUR/USD buy, “felt it would go up”, no stop	-$45
C	Gold sell at resistance, stop above it, $10 risk	+$20

Psychology and your plan