You get a trade idea.
You believe the moment to strike has come and go to place a trade.
Do you ever confirm your trade idea?
Do you ever go through a checklist confirming that it is a good trade?
The current Chess #1 – Magnus Carlsen has said something interesting about confirming his chess moves.
Typically when his opponent makes a move, he usually knows very quickly what move he should make. He has his hunches, his intuition, etc, all quickly tell him what move he should make.
However, he doesn’t stop there.
He can spend the next half an hour confirming his original idea of what move he should make. He wants to make sure it is the right move. He wants to cover all the angles, all the scenarios. He goes through whatever checklist he has in his mind about whether it is the best chess move to make.
He loves his intuition. But he also confirms his intuition.
You should do the exact same thing in your trading.
Confirm Your Trade With a Checklist
You see what you believe to be a great trade. You get ready to place a trade. You have the order entry window open and are ready to fire off a market or limit order.
But, before you do that, you should go through a checklist.
Yes, you love your intuition, you love your hunches, you love gut feeling. Love them all. But you also confirm with a checklist of the components of what a great trade, a perfect trade should be.
Whatever your checklist is, whether you check to see if the market moved above or below a certain moving average, or whether the market is hitting a fibonacci level, or a certain news release came out. Whatever your checklist is, you go through it!
This gives you some basis to evaluate the results of your decision. When the trade wins, you can better figure out why it won, and replicate it – indefinitely.
When a trade loses, you can figure out what to tweak from your checklist / trade criteria. You can determine what the “weak spots” are in your trade blueprint / checklist, and from there figure out which ones to make better, which ones to replace, etc.
Most aspiring traders do not have this checklist. They are winging it. They get these hunches, these feelings, or feel the pressure of bills coming due or things they want to buy and throw on a trade without properly going through a checklist to confirm their trade is indeed a good trade to make.
When I first started I did not have that checklist to confirm my trades.
Eventually I created such a blueprint carefully making it better very year. It’s called the “Perfect Trade Blueprint.”
It is available for you. Get it and use it on your very next trade to add the power of “Confirmation” to your trading.