Chapter 7 · Technical analysis and timing
The written trade plan
Decide the entry, the exit and the size before you are in the position — because after is too late.
43 of 50 · 7 min
This is the lesson that matters most in this chapter, and it involves no indicators.
Once money is in a position, your judgement changes. Losses feel like something to be recovered rather than accepted; gains feel fragile. Every decision you make after entering is made by someone with a stake in a particular answer.
What to write down, before you buy
- 1Why — the reason, in one or two sentences.
- 2Entry — the price you are willing to pay.
- 3Exit if wrong — the price or condition at which you accept the idea failed.
- 4Exit if right — what would make you take the gain.
- 5Size — how much, decided from what you can afford to lose, not what you hope to make.
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