Arguably, the most important part of a successful trading plan is sound risk management. I've recently had to take another look at this as I am only human and fell back into some bad habits. After a fantastic 2nd quarter and some decent gains, I feel I may have become overconfident and adjusted my position sizing too high.
I pretty much broke even over the summer, but then took some large hits over Sept/Oct. I have to admit, my rules for sizing in different market conditions were not very clear even to me and needed more definition. Because of their loosely defined status, I had trouble really trusting my system and didn't have a plan for what to do when I had conflicting signals and which ones to prioritize. This was a major mistake. Thankfully, I know at this point to cut losers even when it hurts and overall I'm not really damaged just a bit disappointed. There's no room for impatience in trading.
