This article was originally written and posted at Trust The Process Trading in November of 2016.
Emotional trading leads to bias trading, and bias trading leads to an eventual destruction of your trading account. Trust me, I learned the hard way. After trading extremely well part time for many years I decided to turn things up a bit in 2007 by trading full time and had a pretty good year returning about 41% on my portfolio. In 2008 we had a new president and as the year progressed I become worried that the new administration would wreak havoc on the markets and I steadily built a very bearish bias. Rather than execute my game plan and letting the price action dictate my trading, I saw a short set ups in most every pattern that came across my screen, and while I profited for a while on the short side, my bias toward a sinking economy under the administration at that time left me ill prepared for the possibility of a huge turn in the markets. Well if you are any kind of student of the markets, or at least conscious, you may not have to guess as to what happened to my performance. The market bottomed in early 2009 and rallied around 80% through the end of 2010, not a good time to be on the sidelines, or firing off a whole lot of short trades.
The year 2017 brings us yet a new administration and I advise you to stop trying to guess what effects this will have on the markets. Those who had a bearish opinion as a result of the Trump victory may have already felt the pain of being on the wrong side of the market. Will the “Trump Effect” continue? No one really knows and if you come across someone who insist he does, run away-quickly! Stick to your methodology and execute your trading plan bringing with you a clear and open mind to the markets everyday and dare I say, Trust The Process!