MANAGING EMOTIONS

No work is stressful.

It is your inability to manage your body, mind and emotions that makes it stressful.

S A D H G U R U

11

BE OK WITH LOSING

No matter how good you are, trade long enough, and you will lose.

It could be one loss. It could be a string of losses. That’s part of trading.

Every trader needs to understand and plan for this. Losing is only a problem when it happens more often than you’d expect over many trades, or you take losses that are much larger than expected. When you accept losing as part of the game, it becomes easier to take those small losses rather than holding on and hoping for more.

12

TAKE BREAKS FROM THE MARKETS

Trading is work as much as it’s fun. It’s stressful and rewarding.

Like any good business, we sometimes need a vacation.

It’s easy to get caught up in the markets. That’s why every trader needs to take regularly scheduled breaks where they unplug. We’re not talking about going home at the end of the day but stepping away from the screens.

Breaks help us centre and reset ourselves, especially when bad behaviour creeps in.

Here are some signs you need to take a break from trading:

• You find yourself overtrading, taking marginal and sometimes sloppy setups.
• You’ve taken a handful of really large losses lately.
• When you’re not trading, you’re going over trades, particularly losing ones, in your mind.
• You become more irritable or have started to lose sleep.

13

TAKE AN EMOTIONAL INVENTORY REGULARLY

We noted that journals are the single most valuable tool for currency traders.

Why?

Because emotions are the biggest obstacles they face. Emotions cause traders to ignore their plans, over trade, take excess risk, or unproven strategies, ultimately leading to disastrous results.

We can’t get rid of our emotions. But we can diminish their influence.

That starts with an emotional inventory.

While you ideally want to do it before every trade, you should at least identify your emotional state before every session.

Ask yourself questions such as the following:

• How do you feel?
• What are your current worries and hopes?
• Have any significant events occurred that could destabilize your work?

If you think that emotions could impact your trading, take a step back. You don’t need to trade every day. There’s always another opportunity around the corner.

Instead, work on the causes of your emotional distress. If you cannot solve them, develop a plan that regularly checks your emotions throughout the day, before each trade, or limits as much in-the-moment decision-making as possible.

14

RESET YOUR ACCOUNT FROM TIME TO TIME

Many traders have mental blocks against certain dollar amounts.

Maybe you struggle to break $50,000 or $100,000. Other times they start taking larger or too many losses when the account grows beyond a certain point.

When this happens, consider resetting your account. Find a set amount you’re comfortable trading with and limit how much you will let that account grow.

Then, simply take profits out and reset the account.

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