Now there are two types of people one those who don’t know that they are impulsive trading other who know they are impulsive trading.
Now since you have reached to this article you are already better than 90% of them who don’t know they are doing impulsive trading.
Now I liked this particular definition of being impulsive on the website – http://dictionary.cambridge.org which explains most accurately.
Showing behaviour in which you do things suddenly without any planning and without considering the effects they may have.
One important thing one should check before changing the strategy or taking any decision. Is the impulsive trading giving consistent results over a long period of time and are you in net gains over a period of time. Then consider not changing anything.
But often you regret entering the contract and change the stop in the opposite direction of the target then there is some major correction required.
1. Aware of Entry, Exit, and Adjustments.
Every impulsive trade you make are you aware of the entry, exit, and adjustment required after entering the trade. Then you are in the right direction your strategy doesn’t need much correction. Compromising the risk management for impulsive trade is never rewarding. If you are trying to prove the market wrong all the time then its better have an overview of your strategies done and get them corrected.
2. Risk to Reward Ratio
Being impulsive can many a time be an outcome of being patience. At times also keeping too much idle cash because of lack of opportunity. It is important that one should check if the risk to reward ratio is managed while taking an impulsive trade decision. Because if you are considerate about the risk to reward ratio then you are very much aware of your outcome and you are ready for any outcome. At the same time, you are considerate of your outcome so at times such impulsive trades are fine.
Do check our article on Checklist of Options Trading Strategy
Also, do let us know your experiences while being impulsive and how you overcame the same in the comments below.