Â Â Â Â Â Do you have a few minutes to create a sign? Â OK, good. Â Open your drawer; take out one piece of paper, a pair of scissors, and a pencil.Â Â On the paper, write the following sentence:Â â€œI will control my emotions or I will not trade.â€ Now, you should mount your completed sign on or near your trading screen.Â Â Good work, the sign looks nice! Now, to get to the purpose behind the sign, letâ€™s digress and visit my trading room from years past.
Â Â Â Â As a new trader, I would take a long position; instantly, as if orchestrated to the push of my keyboard key, the market would move in the opposite direction. I would short the market, and immediately, the market would reverse directions and head for the sky. On the next trade setup, everything would line up great, but because of my last loss, I would hesitate to enter the trade. Â Much to my dismay, the position would surge in my favor; I jump in late to collect some remaining profits, only to be met by a market reversal. Â Again, right on cue, I have another loss. Does this sound familiar? Do you find yourself, like I did, looking at the windows â€“ wondering Â if there was someone hiding in the bushes saying, â€œLook, the guy with the black sweater just went short again; quick, load up on long positions!â€ Additionally, you may be pondering thoughts like: â€œAm I going to get these results every time I trade,â€ or worse, â€œshould I stop trading?â€ Â Well, the answer to both of those questions is: â€œNo, you arenâ€™t,â€ and, â€œNo, you shouldnâ€™t.â€ Letâ€™s take a quick trip down emotion lane.
Â Â Â Â Emotions are a normal byproduct of a traderâ€™s life, and â€“ not forgetting that sign you created at the beginning of this article â€“ you need to be able to control those emotions or pause your trading career until you do. Otherwise, overtrading, taking bad trade setups, and using poor risk/reward ratios can prevail. Â By nature, many emotional issues will not impede your trading, but huge trouble often arrives after three or four consecutive losses. Itâ€™s at this point doubts and fears can enter your psyche, and your self esteem becomes minimized at best. Â Â The resolution here, â€œStay the courseâ€ â€“ if, and only if, you have a trading plan that works, that has given you past confidence, and that is backed with proven consistency. If your trading plan is nonexistent, based on luck, and your main go-to method is taking â€œfeel goodâ€ trades; then plan on riding an emotional roller coaster with anxiety being your ticket to ride. Find yourself a good mentor and a solid trading program; watch how fast panic and stress leave your demeanor, and consistency and profits arrive as a grateful substitute.
Â Â Â Â Having a successful trading plan will keep most emotions in check. A few losing trades are to be accepted, but they are not a catalyst for psychological damage.Â Keep a positive attitude, keep the control, keep your new sign close at hand, and you should do just fine.Â Now, go and have a bad trade and test yourself. Â Just kidding.
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