Managing you trading emotions
Managing your trading emotions is one of the essential parts of being a trader, whether you are day trading or swing trading.
If you don’t understand what your feelings are telling you, you will be in trouble right off the bat.
Trading can have substantial emotional ups and downs for beginners just trying to trade. It takes patience, perseverance, and understanding yourself to achieve long term success in doing anything that involves risk-taking.
When things start to look up, another dip happens that makes it seem like everything is spiraling out of control.
People have emotions no matter what they do in life, so why should trading be any different?
Trading allows beginners to see quick results, but sometimes it can give them more downs than ups.
Learning to separate your emotions from the trading strategy is something that all traders struggle with, whether beginners or advanced.
Common trading emotions
Hopefulness
If things start well in trading, then beginners get hopeful about their success that they will become overnight millionaires just by making one good trade.
It is usually where many different problems come into play because there may be no quick fix to becoming successful in this business.
Trading takes time, and learning to deal with winning and losing takes time to master.
Emotional Range
If you are lucky, your emotions will be anywhere from happy to calm when it comes down to trading.
It is never a good thing if your emotions get the best of you because this makes traders make irrational decisions that they normally wouldn’t do if they considered all aspects.
Frustration
At times, beginners may become frustrated with the markets and overcomplicate trades over what should have been done in the first place.
When frustration comes into play, mistakes are made more often than not but also causes traders to flee from winning trade setups just because of how their day has gone so far within seconds of deciding whether to take a trade.
Defeat
Defeat can sometimes come out of nowhere and prevent traders from sticking to their game plan.
There are times when people can’t get past losing streaks, so they start to ignore what worked for them in the first place just because of one or two bad trades where their emotions got the best of them.
Greed
Greed is one of the worst trading emotions you can feel while trading because this makes beginners think only about making profits rather than cutting losses short.
Beginners become greedy when they see quick wins on small scale trades, making them blindsided by bigger riskier ones thinking nothing will go wrong if they take it because of how well they are doing currently.
Doubt
Doubt is another common beginner emotion that makes them think everyone knows what they are doing except themselves.
It can sometimes cause beginners to overtrade when they really shouldn’t, leading to the next feeling on this list.
Fear
Fear has to be one of the worst emotions you could ever feel in trading because it paralyzes people into making no trades whatsoever due to panic attacks thinking about what will happen if their timing isn’t right.
The fear in trading causes beginners to let winning positions run and losing ones go only because of speculation instead of sticking with what works for them already in the long run.
Impatience
Impatience hits beginners the hardest because of their feeling before getting into trading.
Some people think that if their first trade or two isn’t profitable, then it is game over, but this is the foundation for future trades where patience will allow them to see more remarkable results.
Happiness
It may sound weird, but happiness is another emotion new traders feel when they are on the right path towards success.
All these emotions lead to some happiness after realizing what trading truly takes to become victorious over time and not by throwing caution to the wind like some beginners tend to do within seconds without some form of risk management strategy in play beforehand.