Is trusting your gut more important than following your plan?

money management and trading are the same thing, when floor traders learn,its without charts,news,time to research,its just trading your money and grabbiing profit opportunities and cutting losses,this is mostly gut and common sense,if the amount you are losing is uncomfortable, take a loss,you can always get back in...these forums talk ad nausiam about plans and stops and systems..i've made this comparison before...an architect can draw up plans,designs, plumbing,electrical,hvac specs and weight load psf requirements, but he couldnt build it, after you make up alll your reasons and plans and stops and entries,you have to trade and you have to listen to your gut , everything else is too slow
 
Quote from dandxg:

That depends on how good your intuition is. Keep 2 sets of records your plan vs results with your intuition. If you intuition isn't great then breaking your plan and winning is the worst thing that can happen. It reinforces bad habits.
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I agree with dandxg. Keep 2 records of your transactions using your plan and the other, following your gut feeling. The number will definitely tell you which one works better for you :)
 
Quote from konviction:

I raise this question mainly because Ive had some trades I've

held way longer than I should have, when I knew days and days

before I should probably cut my losses, but I hung in there

because:

1) All the books and "experts" on the forums say to "have a plan, and trade the plan", and "not get emotional"

2) I had a plan for the trade, and I didnt get emotional, but I lost more money than might have been necessary.

So with that in mind, is there ever a reason to deviate from the

plan and say "ok f--k this, this isnt working", and sell?... because

if thats the case, why bother with a plan if we as Traders will be

cool-headed one minute, then "OMG! this thing is tanking, I need

to cut my losses NOW!" syndrome the next. We might as well

just trade from the gut. No need to have stops and targets, and

all that other crap :p sinse those numbers could change any

second... [sarcasm ] . I would like to know what others think. Is it

wrong to stick to the plan, even when your confidence begins to

fade?.

kon
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I'm confused. If you had a plan and accepted your stop loss as the cost of admission to the trade, why would you ever reach the point where you'd say, "OMG! this thing is tanking, I need to cut my losses NOW!"
 
Quote from NoDoji:

I'm confused. If you had a plan and accepted your stop loss as the cost of admission to the trade, why would you ever reach the point where you'd say, "OMG! this thing is tanking, I need to cut my losses NOW!"
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I wasn't refering to myself necessarily , but rather the ever so common emotional swings of most traders, new or professional (jim cramer for example, and other fund managers). What I was trying to get across was this: If a trader has a plan, then that reduces emotional impulses.

But if traders are trading from their gut...and not much else (floor traders for example, and probably 99% of scalpers...and we all know how emotional and chaotic it can be on the floor) then yes, it is like "OMG...." because your making decisions off "Intuition", rather than a sound, and rational educated guess based off the PLAN that you trade from.

Take this chart for example http://www.elitetrader.com/vb/attachment.php?s=&postid=2891759 . I went long around 71.40 because my plan told me too, not because "Oh, well I feel like it's due for a bounce" or any of that nonsense. I had facts to back up my belief that a long trade was the right one to take.

Does that help clear up your confusion? :)

kon
 
Instinct coupled with a good plan, revisit and modify the plan when needed and as additional information becomes available.
 
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