Execution > Analysis: The Reality of Trading

September 1, 2020

Chances are if you’re reading this you are an upcoming trader searching for the keys to success. I’m going to take a guess that your primary focus right now is on chart work & analysis. Reading charts is the thing that most traders put their time and effort into hoping that when they’ve mastered analysis they’ll be catching winning trades left right & centre. The bad news is that there’s much more to it than that…. the good news is that I’m going to do what I can to point you in the right direction and put you one step closer to success.

I’m not talking about the countless hours of mindset work and risk management mastery that you need to go through before you achieve consistency – this is different – I’m talking about the execution phase of your chart work. With all these factors piling up trading may seem daunting and difficult but stick with me! I’m going to give you the rundown on the this ‘execution phase’ and give you some tips & pointers to send you in the right direction. Everyone can win with persistence.

What is the ‘Execution Phase?’

The execution phase is everything that follows your analysis. I’m referring to the act of activating and managing your trade to completion. It’s all well and good creating a beautiful piece of analysis but that’s not where money is made or lost, the creation or loss of wealth comes down to your ability to execute & manage based on the analysis you’ve put together.

The execution phase includes:

  • Trade Entries
  • Stop Loss Management
  • Cutting Losses / Taking Profits

Isn’t It Easy If I Can Analyse Well?

A common misconception among upcoming traders is that if you can analyse well you can trade well. You might think ”but my analysis is on-point when I backtest, why won’t I succeed easily when I trade in real-time?” The answer to this is that executing and managing a trade requires a level of discipline and mental hardiness that isn’t called upon during the analysis phase. Anyone can mark up a chart albeit some better than others but not everyone has the resilient & rational mindset needed to successfully execute & manage a trade to the finishing line be it a win or a loss.

So what’s the execution phase all about then and what do you need to succeed if analysis isn’t enough?

The Ability To Trade Without Conviction

Your success in the execution & management of trades is essentially going to come down to your ability to handle emotion and trade without conviction. I cannot stress enough the importance of learning how to trade like a robot, always looking forward regardless of the wins or losses you encounter and keeping a level head throughout the process of every trade.

Here’s a look at the skills required in each area of the execution phase and some tips to help you successfully start playing trades out from start to finish.


When initially executing a trade you need to wait for the perfect entry setup to present itself with strong confirmation. This requires patience and though it might sound easy to just sit and wait, the fear of missing out on opportunity can lead to poor decision making and bad trades.

To successfully pull off the first step of trade execution you need patience and a clearly defined trading plan with rules that allow you to take only the very best trades.

Stop Loss Management

Once a trade has been executed your next step is to actively manage the stop loss order to maximise profits & minimise risk. This means moving the SL to entry point to cut risk from trades & gradually stepping the SL further into profit as a trade plays out to secure profits in any scenario.

To succeed at phase 2 of execution you need a clear plan for stop loss management and discipline to stick to said plan. You’ll also need the ability to accept breakeven trades so when trades go against you you don’t make the terrible decision to remove your stop in hopes of a reversal.

Cutting Losses

Sometimes a trade will be a loser and that’s okay but you need to be able to manage losers efficiently to prevent them from getting out of control. This is the part of the management phase that causes the biggest downfalls for traders. You can’t remove your SL or add to your trade in hopes of a reversal and you can’t oversize the trades following a loss with the idea of making back losses & then some – 9 times out of 10 this will lead to catastrophic loss. You need to trade without conviction, accept losses and allow them to happen in a controlled manner.

To succeed at the ‘loss cutting’ step of trade execution you must: have a predefined plan for cutting losses, have a predefined SL order that stays firm regardless of your opinions (until the trade runs in your favour). Understand and accept losses as a regular occurrence and have discipline to stick to your processes. It’s also important to remember that principle of always looking forwards – don’t get hung up on losses, move on to the next opportunity.

Taking Profits

On the flip side of cutting losses, when trades go your way you need a clearly defined method of taking profits else you may end up cutting winners short or missing out on them all together. The key to successful profit taking lies with patience and discipline.

To consistently succeed at profit taking you must: have multiple predefined TP levels on the way to your overall target (locks in profit even if a trade goes bad), have patience to hold trades to targets (no closing early else you ruin RR) and have the ability to accept profit targets rather than giving into greed.

The Main Takeaways

Execution > Analysis. When your chart work is at a consistent level and you are able to accurately plan successful trades, you need to put emphasis on your trade execution and management. The key pointers to a successful execution phase are DISCIPLINE, PATIENCE and the ability to CONTROL EMOTIONS.

Create a clearly defined trading plan for entries, management and profit/loss taking and build the mental discipline and emotional resilience needed to stick to that plan without fail. Mastering the art of trade execution WILL take time – but it can be done and success will be met by persistence.

Book A Call

If you want further guidance on personally developing your trade execution & management skills, drop me an email and I’ll be happy to book in a private 1-2-1 call with you to take your trading to the next level.

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