Putting an End to Emotional Trading
Emotional trading is a sure-fire method to lose money and to bottom out your trading account. Emotions have absolutely no place in trading, whether Forex, stocks, or otherwise. Today, we are going to provide you with crucial tips on how to put an end to emotional trading, so you can start making real money.
Stop Paying Attention to Your Score
In order to put an end to emotional trading, something that you need to stop doing is paying attention to your score, so to speak, in the middle of a trading session. The sample principle applies to professional athletes. Whether in basketball, baseball, or football, pro athletes don’t constantly check the scoreboard.
This is because checking the score constantly is super distracting. If a player pays attention to the score instead of what is happening on the field, things will just keep getting worse. This same concept applies to Forex, stock, and all other kinds of trading.
If you are in the middle of a session, with many trades open, and all you do is pay attention to your profit/loss score, you will lose sight of the big picture. You’ll stop paying attention to individual trades and you will lose focus.
You will become emotional, because every trade is going to change than profit/loss score. While trading, the only thing you should be paying attention to are your open trades, not the total score. This is a great way to help eliminate emotional trading. You should only tally up your score once you are done for the day and all trades are closed.
Placing Only High Quality Trades
If you want to put an end to emotional trading, something else that you need to focus on is making high quality trades. Here, you need to have a plan and you need to follow your rules. You need to closely analyze each potential trade, and only execute the ones that show the biggest profit potential with relatively low risk.
Simply put, trading Forex, stocks, and everything in between is all about quality, not quantity. The fact of the matter is that even if you only place a few trades, but they are very high in quality, you can still make great profits. On the other hand, if you place many low quality trades, chances are that the majority of them will put you in the negative. To stop emotional trading, stop trading quantity and start trading quality.
Getting an Education – Having a Plan
In order to put an end to emotional trading, another very important thing is for you to get educated. Forex trading, stocks, and more, none of it is easy. It takes a good deal of skill and knowledge to trade successfully.
If you don’t have the proper knowledge base, you will be much less confident in your abilities. The more you know about trading, the more confident you will be, and the less emotional you will be. Therefore, getting a trading education from a place like Income Mentor Box is highly recommended.
On that same note, in order to stop emotional trading, you need to have a solid plan or strategy. Every good trader has a good strategy that they adhere to. If you have a proven and time tested strategy that you know results in profits the majority of the time, you will be far less emotional.
Don’t Risk What You Can’t Afford to Lose
One of the worst things that you can do that leads to overly emotional trading is risking money that you cannot afford to lose. If you are constantly worried about every single dollar, then your trading is going to be very emotionally charged.
People, if the money you are trading with is designed for your food, rent, mortgage, school tuition, or whatever else, then you shouldn’t be trading with it. If you lose a few trades and you lose that money that you needed to keep a roof over your head, that’s not good.
If every trade might spell the end of life as you know it, your trading game will fail. To stop emotional trading, you can only trade with money that you don’t rely on to live. Only money you can comfortably afford to lose should be risked on the market.
Park Your Ego at the Door
Another thing that you need to realize is that if you have a big ego, that won’t get you anywhere in trading. If you have a big ego, and you win a bunch of trades, it’s going to overinflate your sense of confidence. This will lead to emotional trading where you risk way too much, and that’s dangerous.
On the other hand, if you lose a bunch of trades, it might damage your ego to the point where you become way too cautious and don’t take good opportunities.
Either way, if you plan to be successful in trading, to stop your emotions from running rampant, you need to park your ego at the door. Your ego has absolutely no place in trading. On that same note, you need to get used to the idea of losing money. Risk and loss are inherent factors in trading, and sometimes there is just no avoiding having a trade going the wrong way. It happens.
Keep Trades Small
If you have any hopes of stopping emotional trading in its tracks, particularly if you are new to the world of trading, is to keep trades relatively small. Simply put, if you only risk minimal money on a trade, you won’t be nearly as emotional or devastated if it ends up being a loser.
If you invest $5,000 into a trade, it’s going to be much more emotional for you to lose that, than if you placed a $50 trade. Of course, as you gain more experience, you can start investing more. However, for the time being, to keep your emotion under wraps, keep things small.
Take Care of Yourself
The other tip here to stop emotional trading is to take care of yourself. There are many things that can lead to emotional trading, and one of those is your mental state. If you are tired, stressed out, or anxious, this is going to affect your trading. Simply put, you need to be in the right state of mind to be a successful trader.
Stopping Emotional Trading – Conclusion
The bottom line is that if you want to be successful when trading, you need to put an end to emotional trading. Trading should be 100% planned out, logical, and rational. Your emotions have no place here. If you can’t stop your emotional trading habits, and you want to be the best Forex trader you can be, checking out the Income Mentor Box Day Trading Academy is recommended.