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Veteran trader Toni Turner emphasizes the importance of not changing your trading plan and why "hope" should never be the part of any trading strategy.

Sometimes as traders we get locked into a position, we get caught up in a story about the market. It’s happened to me, and then things go wrong. Sometimes we hope that a trade’s going to work out—we get caught up in a story about Apple (AAPL) or Google (GOOG) or a technology stock especially. Toni, what do you recommend to traders on the subject of hope in particular?

Well, as you and I talked about, hope is not a plan. The absolute rule of trading, Rob, is if you go into a trade you’ve got to have a plan, and if your plan has three numbers, three prices—it has the best entry, your profit target, and most importantly where your stop is, and they’re written in stone—the stop is written in stone…

Especially that.

Written in stone, so we get into this trade, as you’re talking about. We have the story, we’re in a good place, and all of a sudden, the things turn against us.

Right, there’s an earnings released a week from now, but before the earnings release something leaks, and the whole plan we had, the whole idea we had, something snaps.

It snaps and then the hope that we had—which was, of course, part of our plan, because we live on expectations...but if it’s too bit a part of our plan, that emotion of hope begins to turn into fear because the stock is dropping, and the fear—and then maybe we see it hit our stop and we go, it’s a good company, it’ll come back, that line.

Yeah, or move my stop. This is just unexpected and this is going to pass over; this one time only I’m going to pull this off, and hope really isn’t—it’s not a plan, it’s not a trading strategy.

It’s not a strategy. In fact, the hope turns to fear, the fear turns to panic, and maybe you totally ignore your stop, as you said, and then it keeps falling and now you—and now, as we say, now I’m an investor, because you’re toast.

Yeah, you’re a long-term investor now.

You’re a long-term investor. I had it happen when I was a brand new trader—I have the story stock, I didn’t know any better, the thing fell 12 points on me. I could still see Joe Kernen on CNBC saying we’ve never seen this happen to a stock before.

It was in the old days, and I literally couldn’t move my hand. I was paralyzed with fear. Don’t you think that got me into trouble? We can’t trade on hope.

We learn to never do that again. You get one experience like that and it changes you forever.

Yeah, oh, never forget it, and yes it does.

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