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Do you follow your instinct or your plan?

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  • Do you follow your Instinct or your Trading plan?
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  • Post #1
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  • First Post: Nov 28, 2017 10:42am Nov 28, 2017 10:42am
Hey guys!

I have a scenario for you guys today and here it is:
-You're a Forex trader with a trading plan.
-You have tested that plan and you know that in the long run it should be profitable.
-You have followed that plan trading live and you have made decent returns without issues.

At a certain point in your trading your instinct is telling you to not enter a trade but your plan is telling you to enter in that trade.

Do you follow your tested plan or follow your instincts?
Let me know what you pick and why you picked it!


Thanks!
-AntiVi
Quoting AntiVi
Hey guys! I have a scenario for you guys today and here it is: -You're a Forex trader with a trading plan. -You have tested that plan and you know that in the long run it should be profitable. -You have followed that plan trading live and you have made decent returns without issues. At a certain point in your trading your instinct is telling you to not enter a trade but your plan is telling you to enter in that trade. Do you follow your tested plan or follow your instincts? Let me know what you pick and why you picked it! Thanks! -AntiVi
I´m more Plan and Mood.

For example I was selling GJ at 147.746 like my plan, but today I´m not in a good mood, my focus are not 100%, I´m in a lazy day, kind of sick, so I decided to exit the trade with 3 green pips or less ... and look what happen, a nice +50 pips movement.

So if I´m not in a good mood it's preferable not to trade.
Or even in a bad mood stick to the plan.

Green pips.
POW!
Quoting AntiVi
Do you follow your tested plan or follow your instincts?
Are your instincts tested as well ? And I see that you have a live explorer, so till now which of the 2 have u followed, yr plan or yr instincts ? Or both ?
Quoting fxprimate
{quote} I´m more Plan and Mood. For example I was selling GJ at 147.746 like my plan, but today I´m not in a good mood, my focus are not 100%, I´m in a lazy day, kind of sick, so I decided to exit the trade with 3 green pips or less ... and look what happen, a nice +50 pips movement. So if I´m not in a good mood it's preferable not to trade. Or even in a bad mood stick to the plan. Green pips.
In my opinion in that case if mentally something is wrong and you can't focus enough or something like that it's better to take a day off than to trade as long as you have some discretion in your trading but if your strategy or strategies are purely mechanical I see no reason to stop trading as long as the discipline to stick to it is there.

I hope my perspective on that makes sense.



Quoting metta87
{quote} Are your instincts tested as well ? And I see that you have a live explorer, so till now which of the 2 have u followed, yr plan or yr instincts ? Or both ?
In this example your instincts are not really tested.
In my personal trading I have followed only plan so far however I analyze every single trade and even how I felt taking those trades so once I have a nice sample size I can see if my instincts are better or not and even if they are do I really want to implement them in my trading.
Quoting AntiVi
{quote} In my opinion in that case if mentally something is wrong and you can't focus enough or something like that it's better to take a day off than to trade as long as you have some discretion in your trading but if your strategy or strategies are purely mechanical I see no reason to stop trading as long as the discipline to stick to it is there. I hope my perspective on that makes sense. {quote} In this example your instincts are not really tested. In my personal trading I have followed only plan so far however I analyze every single trade and...
Yep
POW!
I follow both my instinct and plan. Instinct is something that doesn't work all the time. It is a practice also. The more you practice the more you develop the skills. The best thing about instinct is it never lies. The main problem is making the difference between instincts and Ego.
Plans go wrong and following one's instincts is worse
I’d follow the tested plan, it’s built on data, not emotions. If instincts persist, I’d analyze them later to see if the plan needs adjusting.
That’s a tough one! Personally, I’d stick with the plan. It’s been tested and proven to work over time, so I try not to let emotions or instincts override it. That being said, if my gut feeling keeps popping up, I’d note it down and maybe review the plan later to see if there’s something I missed.
Of course I follow my trading plan. The discretionary component is always there, let's imagine we have a perfect setup on a stock. We have a volatility extreme (hence a value opportunity) that has occurred on a support zone for example a Bollinger band or calculated through other volatility algorithms. Furthermore, the stock is outperforming the reference stock index and is in a trend. It seems like a good opportunity however the quarterly report will be released in the next two days. The macroeconomic data can influence the technical data, although technically it is a good situation at our discretion we must skip this opportunity because the release of the macroeconomic data can be in our favor but also against us. The impossibility of establishing correct risk management forces us at our discretion to stand still and watch.
I'll give an example with my trading plan. Let's technically analyze the Cameco Corporation stock, the largest uranium company in the world, in three steps.

First figure:
On September 25th, a positive slope of the 40-period linear regression line begins. But from a quantitative point of view, for us the trend is valid only when R Square is greater than 11.

Attached Image (click to enlarge)
Click to Enlarge Name: cameco1.png Size: 108 KB


Second figure:
Let's select the TSX as a comparison index and see if Cameco shares are outperforming the Canadian TSX index. The value of the Mansfield Relative Strength is positive so the answer is positive. The stocks are trending upwards and are doing better than the benchmark index.

Attached Image (click to enlarge)
Click to Enlarge Name: cameco2.png Size: 98 KB


Third figure:
During the uptrend the price touches the lower volatility band calculated with the 40-period linear regression. We are in a support zone and prices are attracted towards the central axis due to the principle of reversion towards the average values. We have an extreme of volatility with the indicator below 3. This indicates a value opportunity (edge) The trading plan tells us that at the opening of the following day we must buy Cameco shares and ride the trend and outperformance.
But the quarterly report comes out on November 7, 2024, we don't know how the market can react, there could be a significant gap against us, how do we manage the risk? Discretion must prevail on the trading plan and I do not do this operation.

Then everything went well and the data did not affect but I couldn't have known before.

Attached Image (click to enlarge)
Click to Enlarge Name: cameco3.png Size: 114 KB
Quoting AntiVi
Hey guys! I have a scenario for you guys today and here it is: -You're a Forex trader with a trading plan. -You have tested that plan and you know that in the long run it should be profitable. -You have followed that plan trading live and you have made decent returns without issues. At a certain point in your trading your instinct is telling you to not enter a trade but your plan is telling you to enter in that trade. Do you follow your tested plan or follow your instincts? Let me know what you pick and why you picked it! Thanks! -AntiVi
I try following my plan but I end up giving in to my emotions and instincts and that has not been a great move on my end. I’m working on it!
I think the biggest problem is looking at the market and thinking that something is not going to happen or that it might happen. From my own experience, the market surprised me numerous times. And so staying true to your trading system is better than gambling on your instincts.
Risk Management is of utmost importance!
  • Post #14
  • Quote
  • Last Post: Dec 27, 2024 1:10am Dec 27, 2024 1:10am
Quoting AntiVi
Hey guys! I have a scenario for you guys today and here it is: -You're a Forex trader with a trading plan. -You have tested that plan and you know that in the long run it should be profitable. -You have followed that plan trading live and you have made decent returns without issues. At a certain point in your trading your instinct is telling you to not enter a trade but your plan is telling you to enter in that trade. Do you follow your tested plan or follow your instincts? Let me know what you pick and why you picked it! Thanks! -AntiVi
I’d follow my tested plan. My instincts can sometimes be influenced by emotions, but the plan is based on data and testing, which has proven to work over time. Sticking to the plan helps avoid impulsive decisions and keeps me consistent in the long run.
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