For some reason, he feels the need to take a winner off when it's gone so far. He has a hard time breaking out of his resistance level. But it seems that once he gets into that big, winning trade, his approach goes out the window and he succumbs to emotion.
Traders tend to do a good job setting up a game plan, says Hirschhorn. But as risk starts to develop, they second guess that strategy. And that's when he advises them to compartmentalize and ask themselves, 'If I didn't have a trade on right now, what would I do?'
Gordon understands, but if it's a big winning trade, he believes it's generally going to take you beyond the time frame where you can see into the future. If a trade is going to be on for 2 to 3 days, for example, and you wind up with a trade a week out from now, it's kind of hard to see out into the future. So you can't, based on your technical analysis, see what the market's going to be like. That's why he believes starting it over as a new trade, even though he might be up 300 to 400 points on the trade, is a good idea.
Gordon says he's gone through all the buy/sell systems and ways to analyze the market and is content with his system. But that doesn't mean he isn't always trying to tweak or perfect it.
Gordon emphasizes trusting yourself to have a plan in place and believe you have the ability to execute that plan. And when things don't go well, don't go back to the drawing board and try to redo your style. Even though your style won't work in every market, you still need to have the confidence to sit back, relax, and wait for the market to come to you.
Think better, invest smarter.