Trading Emotions : How to keep it under control
Trading Emotions : How to keep it under control. SmarTrade PH is here to help you manage your emotions not to affect your Trading journey.
We cannot avoid emotions while we are trading in the market. Once we look at our computers, cellphones, or tablets, we sometimes become emotional out of fear or greed. We become fearful because we might get stopped out, or if the market crashes, we tend to sell our position immediately. On the other hand, we become greedy because we want more PROFIT from the market. That’s why we tend to move our previous target profit, and in the end, the market reverses. Our unrealized gains become realized losses.
Becoming emotional while you are trading is NORMAL, so don’t worry if you feel that way. What we need to do is to reduce the emotions that we feel while we are trading. We should know how to manage our feelings once it controls our mind.
Here are some tips that will help you to manage your emotions.
Create your trading plan
Every trader has their analysis and approach to the market. You can be a Scalper, Daytrader, Swing Trader, or Position Trader. After all, it is up to you what kind of trading style matches your personality and lifestyle. To manage our emotions under control, we must have an approach in the market by formulating our strategy based on our experience, mentors, or webinars/seminars. Having your trading plan means you are the one who will create your risk tolerance on where, when, and why you will trade this market. If you keep revising your trading plan, you are on the right track to becoming a great trader,
Don’t focus on the profits, focus on the process of doing it.
When we start trading, most of us tend to focus on the profits rather than the process of trading itself. We become greedy because all we want is GAIN from the market. We want to earn money right away from the moment we start trading. However, trading is like a business. It will take you many months or even years to become a consistently profitable trader. Suppose you worked hard enough in trading by showing up every day on the chart. You will one day reap what you sow in trading. Right now, if you are not yet profitable, enjoy the process of doing it and enjoy trading.
Trade where the market environments are favorable with your edge
Once you have finalized your trading plan, it is all about execution in the market. This is the hardest part of trading since it is where all emotions come in while trading. Sometimes we become impatient because we want to enter right away without any setup. We tried to enter for the sake of entering the market or for the sake of trading itself. We must learn to control our emotions by being disciplined and patient with our A+ setup. When we have an edge in the market, we know that when we trade this kind of setup, it will give us a huge probability of winning in the trade. Again, trade with your edge and let your system play out in the market.