Tricks To Control Your Emotions When Trading
Sunday, March 13th, 2022
Day traders need to be able to control their emotions. Trading can be a good way to make money from home, but if you’re sensitive, it could be tough. Day trading takes focus, so you need to take control of your emotions when trading. How can you do this?
Take A Walk After Each Trade
Take a walk, even if only for a few minutes, after each. Day trading can be fast-paced, so it is very easy to get caught up in your emotions, whether you’re looking at stocks or CFD trading.
Getting up and walking away from your trading screen is a deliberate break in your trading tempo. This physical activity can help you take back control. This simple step will clear your mind and reminds you that you are in control. Taking a break from the desk is a good tip for any kind of freelance work.
You could also try listening to music to detach you from the market. Visit Singular Sound and get the best looper to mix your tracks. The market doesn’t your drag you into a trade. Remember that you can walk away from the market any time that you want. You are the one that is in control.
Find Out The Least Volatile Hour Of The Trading Session
Read a book during this hour. Most strategies for day trading work best when price action is volatile. Trying to trade when the market is congested will lead to frustration and anger, and your emotions end up all over the place.
The best solution is to take a break when the markets are going nowhere. Make a coffee, read a book, or go for a walk. Don’t read a book that is about trading during this break. Trading books will give you trading ideas and you might be tempted to try those ideas straight away. Trading ideas, before you make them part of a consistent trading plan, are losing proportions.
Don’t Make Decisions Based on Headlines
Sometimes, what sounds like really bad news regarding a fund or a business you’re investing in might not really affect your standing as much as you think it might. For instance, if you read up on something like the Skyview Capital lawsuit, the headlines might make you think that it would be an unsafe investment. However, you should always read beyond the headlines and instead look at the actual performance of investors who have money in the venture, especially if the headline is years old.
Stop Trading After Three Consecutive Wins Or Losses
Three consecutive wins can make you feel like a superhero. You feel like you can’t lose. You feel invincible, and this can lead to over-trading.
On the other hand, three consecutive losses can make you feel like a loser. You don’t want to lose, so your emotions explode and you revenge trade.
Whether you lose or win, after the third time in a row, it’s hard not to get affected by it. Avoid this problem altogether and stop trading after three consecutive wins or losses.
Don’t Look At Your Profit And Loss While You Are Trading
Nothing causes your emotions to surge more than your profit and loss figure. To a lot of traders, the profit and loss figure is an expression of their self-worth. Remember that this is not true, and you are greater than just your profit and loss.
If you follow the most important trading rule and have a daily loss limit in place, you will already be protected from severe losses. This means that you do not need to check your profit and loss figures constantly.
Whenever you feel like looking at your profit and loss for the sessions, read your trading rules instead.