Trader’s trade get stressed out because they don’t know what to do, or they know what to do but don’t do it. In this article we will read some important ways to manage trader stress. There is a big difference between reading about trading or doing a practise trade and actually trading with real money on the line, which many new traders find out the hard way.
Trade Like It Is A Business
When you trade, it’s very likely that half of your trades will lose, and your profits will come from the other half. You can’t control the market, but you can control what you do, how you enter and exit the market, how big your positions are, and how you trade. Doing the right thing at all times keeps you from having to deal with a lot of stressful situations. The most important thing in trading is to make the odds work in your favor, not to have fun. This is a business, not a ride at a theme park. You should trade like that.
Top 15 Ways to Manage Trader Stress
- Only risk 1% of your total trading capital on each trade, with stop losses and the right amount of money in each position. Position sizing in the right way reduces the emotional impact of any single trade. There are 100 more trades to come, and each one is just one of them. This gives traders an entirely different mindset than if they were all in and had to be right all the time.
- Make sure you only trade with a position size that you are familiar with.
- Trade a method or system that you believe in, based on how well it has worked in the past.
- Before you start a trade, figure out where you’ll get out.
- Only trade if you have a detailed plan.
- Follow your trading plan and believe that you can do it! If you want to lower your stress level, you need to have faith in yourself first.
- You should know who you are as a trader, and only do trades that you would do. Take trades that you won’t be sorry about, even if they didn’t work out. Good trades are good trades, no matter what happened.
- Do not listen to any advice about the trade you are in from people you don’t know. Follow your own plan and keep yourself from being distracted by things that don’t matter.
- Sit out markets that you don’t want to trade because of high volatility or other risks.
- Get all the facts before you buy or sell. Be sure of your trade until it hits your stop. When your stop loss is hit, immediately exit the trade.
- When you trade, don’t let your pride get in the way. Make money and lose money like a business, not like a person.
When the odds are in your favor, only trade. It is a lot less stressful to trade this way.
- If you follow all the rules, don’t blame yourself if you lose. The market gives and takes away. Make sure you keep taking your turns and exits.
- If you don’t know what to do, don’t do anything.
- To lower your stress level, don’t trade as much and don’t keep an eye on every single price change. Day traders, swing traders, and trend traders could only trade the open and close hours. You could go from checking in every minute to every hour or so if you have a lot of options or hard stops in. Most of the time, trading is filled with random noise. This will make you stressed out, so you should avoid it. In this case, only use the quotes that really matter when they do.