So firstly, if you have not watched the introduction video, welcome to the course! I hope you will find my knowledge useful, and can learn from my experiences. To begin, I wanted to share my thoughts on emotions whilst trading, and the journey in which one gains the ability to adequately control them. For most traders this is the hardest aspect of the job by far, and a continuous learning process. Of course, being able to analyze and interpret a chart correctly is very important, but if you do not possess the emotional control to execute on your analysis consistently, you will find yourself consistently losing money. Unfortunately, this is the one part of trading that is incredibly difficult to teach. Each trader will have their own unique journey in understanding how to manage their emotions in the face of big losses and losing streaks. The best way to learn is by doing (and failing), and I speak from experience.
When I started trading, I followed a lot of advice from various figures in the trading industry, and would spend all of my time trying to find profitable strategies. However, I spent very little time learning how to manage my emotions or setting myself rules to follow. This led to frequent revenge trading and a lot of bad decision making during my first 1-2 years. So whilst I spent many hours studying the charts and learning various strategies, when it came to implementing them it would almost always end badly for my account. I think most traders believe they will be different, and they will become profitable quickly and consistently, but it only takes 1 or 2 bad mistakes on an off day to do some serious damage to both your account and your confidence in yourself as a trader. A reckless, emotionally driven decision can wipe out months of hard work when you are starting out; this can be extremely difficult to come back from. Often, a lot of traders will end their journey at this point, hence why the % of successful traders is so low. It is my belief that these setbacks happen to nearly every new trader, however the traders that succeed long term are the ones who can pick themselves back up and try again.
While I have made it clear that there is not much I can do for you on this topic, here are some of the techniques I use to manage my emotions to the best of my ability while trading:
Set times in which you do not trade - for me this is the late evenings (9pm onwards) and I make sure to take at least 1 day off a week. Dont burn out
Have a pre market routine and get yourself into a positive mindset to start the trading day
Treat this job professionally - turn up in accordance to your timetable, be accountable, and don’t trade in your pyjamas. This will put you in a professional mindset and will help you take professional decisions
Do not trade in the 30 minutes directly after a loss, regardless of how good a trade looks - you may lose out on a few winners but I guarantee this will save you a lot in the long run
2 big losses in one day - stop trading for the day
3 losing days in a row - take the rest of the week off
Big winner for the day? Stop trading there! Get away from the charts and be happy, don’t give your money back to the market!