A colleague of mine just returned from a scuba diving trip in\rCozumel, which just happens to be one of my favorite places to\rdive. Anyway, she was telling me about an unexpected difficulty\rshe encountered while swimming around the corral reef down about\r85 feet. It wasn't anything serious but her story reminded me of\rsomething my scuba instructor used to say over and over again.\r"Plan your dive, and dive your plan".

When you're down about 90 or 100 feet the nitrogen acts on your\rbody in a way that's not too dissimilar to having one dry\rmartini on an empty stomach. It's called Nitrogen Narcosis,\rRapture of the Depths, or Martini's Law. So the thing to do is\rget your planning done while you have a clear head, (i.e. on the\rsurface). And then when you're deep into it, and you're feeling\ra bit euphoric, or nervous, you don't have to make any decisions\rabout 'what' to do. You just follow your plan.

This holds true for trading as well. When you're feeling the\reuphoria or nervousness set in, remember to follow your plan.\rAnd, uhm yeah,, also have a plan to follow. Clear heads will\rprevail.

Years ago I had the good fortune of talking with a trading guru\rfor several hours. This individual is world renowned for his\rtrading saavy and skill. What he elaborated in that\rconversation had a tremendous impact on me. HE said that when\rhe learned how to trade that his family enforced only one rule\rthat he had to follow. KNOW WHERE YOU ARE GOING TO GET OUT\rBEFORE YOU GET IN. He felt that the problem that most traders\rhad was that they felt that this simplicity did not apply to\rthem. I remember sitting and speaking with him and thinking\rabout my own mistakes, primarily letting hope take over in my\rdecision making.

Many traders think that crying "UNCLE" on a trade and taking a\rloss is unacceptable. Since that conversation I have taken\rnumerous losses on trades but it's funny how they don't have the\rSTING that they used to because I PLAN MY DIVE and DIVED MY PLAN.

This is really simple and incredibly workable. Apply it to your\rown trading and investing.

-Downjonesfully,

Harald Anderson\rhttp://www.eOptionsTrader.com

Harald Anderson is the founder and Chief Analyst of eOptionsTrader.com a leading online resource of \rOptions Trading Information. He writes regularly for financial publications on Risk Management and Trading Strategies. His goal in life is to become the kind of person that his dog already thinks he is. http://www.eOptionsTrader.com.