How to reduce stress in Forex trading

May 18, 2016 14:27

Dear Traders,

Are you tired of pulling your hair out due to stress?

Have you ever broken a sweat while trading?

The losses won't stop coming.

The days seem to be getting shorter and shorter.

Your work and family responsibilities are there to remind you that trading should not be the only thing on your radar.

I bet you have felt this at least once during your trading career, right?

Trading is definitely stressful, so we traders should strive to keep our stress levels under control.

The idea of losing real money in a Forex trading may lead to frustration and even worse, anger aimed at yourself or the markets.

Spiral of emotions

Trading can be a grind.

In order to trade properly, your emotions should optimally stay optimistic.

When you start making profits, your emotions will reach the stage of enthusiasm and passion.

Think of it as price action.

As soon as the price touches resistance, you should think about either booking your profits or protecting your trade.

The same happens with the emotional guidance scale.

When you feel very excited about the trade and profits, you should think about exits or protecting your trade (scale out).

Many traders simply ignore the emotional scale, become greedy and make newbie mistakes instead of making profits.

One of the typical mistakes is also trading new setups, when you're at the stage of euphoria.

Trading under these circumstances will do more harm, because you trade emotions not the price.

Some traders believe that making money calls for home-run trades.

Maybe they have a friend who bought something for $50 and sold it for $500.

Traders love to talk about their home-runs, while forgetting to mention their strike-outs.

They can still wish for a lottery trade that will mean early retirement.

But this is a trap.

Things that position traders for big wins:

...may also expose them to big losses...

...and it usually happens when they experience euphoria.

Optimal emotional level

Making a trade while being optimistic will:

  1. make you feel good when you make profits; and
  2. in the case of a loss, it won't suck you into a spiral of doom.

The worst thing you can be is pessimistic.

If it happens, you are one step closer to the negative emotional spiral.

Remember, you need to think about it in terms of price action.

Boredom is a negative spiral resistance and contentment is a positive spiral support.

Whenever you feel losing a trade, don't ever let your emotions break the support.

Breaking support, will lead you into the negative emotional spiral.

As price action goes against you, your emotions are breaking the support and going lower down the negative spiral.

If you don't react and stop falling, you will invariably become trapped in a spiral of doom.

Spiral of doom

Additionally, you should start giving yourself positive vibrations each day.

It doesn't have to be something big.

It can be just saying to yourself, "I am good" or "I feel good".

This way, you supercharge your brain with positive emotions that help increase your focus, memory and awareness.

Ever noticed how you get better at doing tasks when you're keeping it positive?

It's no different when you're trading.

Final thoughts

Have you ever become trapped in a spiral of doom?

Is there another way you can deal with the stress?

How do you practice positivity?

Feel free to add your thoughts and experiences in the comments below, as I would love to learn a bit more from you.

Cheers and safe trading,

Nenad

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