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If you’ve landed in this article is probably because your in intermediate phase of your trading journey.
This is where a lot of losses happen, and you know it has everything to do with your emotions.
But there’s nothing to fear, knowing how to control your emotions so it does not mess with your trades is teachable.
Let’s dive into the different types of emotions, and how to control them so it does not mess with your trades.
Greed is one of the most common emotions that can mess with your trading. Greed happens when you, the trader, doesn’t know when enough is enough.
You’re constantly desiring more money from trading, which can lead to holding on to losing trades for far too long or risking too much on a position.
The term hope is typically used in a positive light, but in trading, hope can really mess with your trading and head.
If you catch yourself in the “hope” emotion, this is probably because your trade is down by more than -30%, ad now you’re in the belief that the trade will eventually turn profitable.
This can be a dangerous emotion to sit in because it can:
Fear is another common emotion and may be one of the most common emotions that a trader may experience. This emotion can stem from a number of reasons:
This emotion can mess with your trade since it makes you make impulsive decisions, cutting your winning trades too early, cutting your losing trades too late, and maybe not taking profits when you should.
Regret is a sneaky emotion/feeling that can really creep on a trader. This can mess with your trade because regret can lead to second-guessing your ability as a trader.
Controlling your emotions while trading is critical to any trader because it can be the difference between a profitable trader versus a failing trader.
If you let your emotions control your trading you run the risk of:
All these cons can lead you, the trader, to quitting or really hurting your financial future.
But by being aware of your emotions, and learning to manage them, you can increase your chances of succeeding. You can avoid having your emotions mess with your trade.
At this point, you may feel like “why can’t I control my emotions in my trading?”
I was there too, but I learned by using 2 strategies. I’m going to give you those strategies that has helped me control my emotions while trading – Straight from personal experience.
Here it is: Reflect, and talk out loud while trading.
By reflecting and talking out loud on a daily basis, you will slowly chip away on trading with your emotions.
Okay let’s go over each one!
These emotions affect your trading, because they’re bad habits. Bad trading habits are done subconsciously.
By reflecting after every trading session and you ask yourself a set of questions, you can learn to be hyperaware of your actions. Thus not being a habit.
Here are some questions that I ask myself after every trading session:
By gaining awareness of your emotions while trading, you slowly chip away at the these emotions until one day it requires little to no will power to control your trading emotions.
The wonderful part about trading is that it’s done within the comfort of your own room or home, no one but you and the walls.
Studies have shown that people who talked out loud allow you to process your thoughts and ideas more deeply, thus helping identify any gaps you’re not seeing.
Here are a few pros of talking out loud to learn to control your emotions:
As you learn to become aware of your emotions while trading, and you learn to control them, take the time to take breaks, talk to a mentor, and have a positive attitude.
Do not feel discourage because every trader goes through these experiences, especially in your beginner and intermediate levels.