Balancing Emotions

Techniques to help you balance emotions

Try not to be overly positive or overly negative when looking at the market today. So, before every trading session, take some time to sit in a quiet place, close your eyes, take a few deep breaths and then see in your mind’s eye, the net result of yesterday’s trading, your win or loss net results. See the number in your head, then make those number’s “snap” to zero. Do this a few times.

The more you do this, the less you will feel the emotion that came with yesterday’s results, putting you into a great mental place to assess the markets. Being self-aware is one of the most important aspects of an advanced trader’s mind-set and here is one that everyone can start with.

If find yourself lying in bed, trying to get to sleep and you’re thinking a lot about your trading, then it may be a sign that you’re over trading and it might be a time for a break. To become a successful, trading should be part of our lifestyle rather than dominating it. If you find that your trading results are playing a large part over how you feel about your life or you’re going to bed at night thinking about your trading, it might be time to scale the trading back a bit or take some time out.

Take a break, even during a run of profitable trades

Sometimes we will experience a batch of wins which makes us feel like we are on a “winning streak”. At a time like this, it’s extremely easy to start believing that we have the secret to profitable trading and that the markets are on our side. As we know logically, the market does not know who we are and does not care, hence it will never be “in cahoots” with us. So now could be a good idea to take a little break from trading because what can happen is that our overconfident feeling can make us take trades that, in the cold light of day, don’t match our trade criteria. What you can find is taking a break from trading, re-centring yourself, can increase a “good run” in the markets.

Knowing what we can and can’t control in the markets.

We only have control over what we do before we enter the markets. We do not have control over a trade once it’s live. Knowing and embracing this could make us even more selective over exactly which trades we take and only select the very best trades that we can possibly find.

Focus on percentage returns as a goal

Goal-setting is something that even the most successful traders do. They know what they want to make in an allotted time frame. This also makes up part of their trading plan. Your goals as far as financial returns should always be measured in terms of percentages, instead of $, £ or Euro amounts. Thinking about returns in terms of $’s, £’s or Euro’s risks us equating our trading goals (returns) to what we can buy with them. A new car, a new house, freedom from a 9-5 job etc.

These things are emotionally linked for us humans and we want to be emotionally flat when we trade. Focusing on a percentage goal on a daily, weekly or monthly basis will represent a much smaller emotional connection to us and allow us to focus on the process of placing trades perfectly, in the context of following our trading rules.

  • BrokerEUR/USD
    InterTrader 0.6pips (fixed) margin: 3.33%
    IG 0.6pips (fixed) margin: 3.33%
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