I've been doing some reflection on what goes through my mind/emotions when I'm making or managing my trades, and I discovered something that I know will really help me with my trading. Basically, whenever I make a trade on some suboptimal setup, I tend to be more nervous. Things I'll typically do are to constantly check the lower time frame charts or feel comforted knowing that some friend of mine is also in the same trade etc. The moment an opposite signal occurs on a lower time frame chart, the nervousness in me shoots up and I do things like cut my position in half or tighten my stop so tight that it is easily hit. I subconsciously know that I've made a poor trade entry and want to reduce my stress by getting out of the position ASAP. Very often this leads to poor trade management decisions.
On the other hand, when I make a setup that fulfills all my entry criteria, I tend to be much more confident. I know that if my stop is hit, so be it. Given a choice I would still have taken the trade all over again. I do not get shaken out easily by lower time frame movements.
So my point is, it is very important to be very disciplined and selective with our trade setups lest our psychology gets affected while managing the trades. I'm still having problems with over trading and am working on it. I'm trying to trade only 4H and daily charts for now as that would give me more time to really "hunt" and wait for setups instead of jumping into them.
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