Beware! Emotional Trading Can Destroy You.
When we talk about trading, you are your worst enemy. If you fail, it’s not because you made wrong choices. It’s neither because market is treating you badly. It’s not because, your luck is not supporting you. It’s also not because trading is not in your horoscope.
Have you ever blown up your trading account because you lost control of your emotions?
Have you ever got affected by fear?
Have you ever blown up your trading account because of GREED?
Go ahead! These points below can help you control your emotions and make winning positions:
1. WALK – Take a walk after each trade
You should take a small walk, for a minute or 30 seconds. It is very easy to get trapped in the sea of emotions because of the nature of trading.
The market does not drag you into a trade and hence, you can walk away anytime from the market and YO, you are in control
2. MUSIC - Go and listen to your favorite songs. Make sure you never listen to any sad songs.
Listening to your favorite music can calm your mind and let you with a calm mind that you can utilize in your next trading.
Listening to music helps you detach from the market.
3. FIX DAILY TRADING TIME
Find out the least volatile hour of the trading session and place trades during that hour. Trying to trade during high volatility market leads may to frustration which is always followed by an anger and thus your emotional dam is broken.
The simplest solution is to take a break when you see volatility.
4. Target Achieved : STOP Trading!
Make a daily target. It could be anything based on your budget, 4 continuous WINS or 4 continuous losses.
If you win 4 trades, you think, you can not loose. You over-trade and land to losses.
If you loose 4 trades, you think, you are a looser. You don’t want to loose. Human inside you keeps pinching you to make another trade. Your emotions explode. You revenge trade and loose more.
So, either make profit or loss. STOP immediately and wind up for the day.
5. FEAR : Reaction When Scared
Fear is a reaction, courage is a decision.
Fear is a destructive emotion that destroy a trader’s inner peace.
While trading, ask your self “Am I Scared”? If you answer YES, STOP and exit immediately. Re-review your trading rules and start again with a fresh day.
6. Don't Panic : Stay Calm if in Loss.
Any day if you lose money on the market, the natural urge to get it back will arise. You’ve to IGNORE it. You've to! You've it. At any cost.
This urge of getting your money back will push you to make bad decisions. You may think of a good position when its actually a bad one. This is the time, when you will end up losing even more.
This thought process is opposite of fear and can be more dangerous.
However, if you're disciplined and you follow your rules, you will be fine.
7. WHO AM I? - Know the Man in You
Can you handle losses?
If you answer it YES, go ahead.
If you answer it NO. STOP. STOP immediately. Do not invest your hard earned money at this moment.
Do you get excited when you make money?
If you answer it NO. Go ahead. Start Trading following your plan.
If you answer it YES, STOP. Excitement leads to disappointment and can make you loss that you earned recently.
Record your emotions and learn from them.
If you want to make money on a long term from trading, you need to MASTER YOUR EMOTIONS.
With these tips and tricks, your can start to control your emotions on a long run. Not quickly but slowly, your emotions will be under control.
Personally, I am not a psychologist and I am not a fan of similar psychological advice, but I hope that the tips above can help you because they did help me, and my emotional diary is my great life assistant.
Good Luck!
0 Comments