When you have a system… and you have a predefined reason to change your mind, then you don’t have to live with that feeling of being “wrong”.

Instead, you can live with the freedom of knowing that you have a plan that allows you to change your mind and get back in sync with the market.

Here are a few tips and one practical example.

Don’t waste your time sharing your opinion about what will happen in the future. Instead, share your plan for the various scenarios that could play out.

Pre-define your reason to set a new course of action. Make it a simple reason… a very simple reason. If you have too many criteria, then you can find too many reasons to delay making critical adjustments.

Example.

I was watching my three core indicators closely over the past few days as the RUT (Russell 2000) was approaching a new high. Some of the broad indexes were relatively weak and the long signal was not showing up.

I took this as a reason to be net short. I was looking forward to being “right”.

However, yesterday, the one simple reason I was willing to change my mind happened. That reason was the TEA indicator on the Daily RUT.

Even with the short term weakness this morning, I have my reason to change my bias and I’m going to follow that reason… Until my pre-determined reason to change back to bearish comes around again.

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