Sometimes, as traders, we overthink things.

It’s one of the bigger failings of us as humans. Even when everything lines up the way we want it, we second-guess ourselves.

The reason this happens so often in trading is we want things to follow our logic.

If I see a pattern develop and it matches my trade plan, I consider entering the trade. The end.

But suppose a week later, I see the same signs… on the same stock. My trade plan says to look for an entry point.

However, the logical part of my brain says, “Hey, you already took the gains on this trade. Move on!”

If I had listened to that part of my brain… I would have missed out on two more winning trades.

If you jump into my trading journal, you’ll see PROG pop up there a bunch of times. Three times inside of a month, actually.

This isn’t by accident.

PROG fit – and continues to fit – several fundamentals that I’m looking for in a trade:

  • Upcoming catalyst event in November
  • The first two trades were trend reversals
  • The third trade was a higher high, higher low pattern
  • And of course, any time I am looking to enter the trade, the volume ticks back up again (look at all those gray bars!)

Let’s review how each of these trades did, on average (some shares were sold in stages):

  1. September 29th-30th: Bought at $1.069, sold at $1.262
  2. October 5th-11th: Bought at $1.279, sold at $1.455
  3. October 22nd-25th: Bought at $2.862, sold at $3.339

This goes to show you: Having a clear trade plan to follow is one of the most important steps to take if you want to be in trading.

Too many traders follow their whims and wind up making mistakes. If I thought about it too logically instead of listening to my trading plan, I probably wouldn’t have caught all of these trades.

And for the record, the catalyst event is still coming up in November – so PROG is still on my watch list.

Will I trade it a 4th time before the catalyst event comes up? Keep an eye on my trade plans and see what happens next!

Jeff Williams

Jeff Williams is a full-time day trader with over 15 years experience. Thousands of entry-level and experienced traders alike – day-traders and swing-trade small cap stock traders – credit Jeff with guiding them to turning small accounts into big accounts.

Jeff’s "Small Account Challenge" shows people how to transform accounts from a few thousand dollars into $25k, $50k or even $100k.

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