When new traders begin their trading careers, it gets easy to be caught up in the emotional rollercoaster known as the capital markets. Most specifically, traders succumb to the emotions of hope, fear and greed.
An article on www.stockstotrader.com highlighted five ways to cope with the emotions of trading:
- Accept That Some Things Are Simply Beyond Your Control: you can only control your emotions, but not the movement of the market.
- Take a Breath; Refocus: take ample time to release from the markets when trading goes awry.
- Practice Regular Stress Relief: activities like exercise can be physically and mentally soothing for traders.
- Be Mindful of the Bigger Picture: a trader should look at their long-term goals as opposed to the immediate wins and losses of trading.
- Let Go and Move On: if a trader takes a loss, it’s easier to move on rather than try to regain losses through unnecessary trading.
Traders can download a PDF version of the post and keep it next to their trading workstation to keep these tips in mind when he or she feels like their emotions are getting the best of them in trading.
Traders can have a complete understanding of the markets or have the best trading technology available, but without emotional control, they may still find themselves on the losing end.
In the video below, David Paul, Financial Trader and Managing Director of Vector Vest UK comments on how traders can cope with hope, fear and greed in the capital markets.
For more trends, visit the Leveraged Inverse Channel.