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Trading Psychology – How To Manage Yourself Part Two

July 27, 2019 Posted in Forex Trading News by No Comments

7 Tips To Get You Off The Roller-Coaster

1. Ask yourself at different times during your trades ‘am I afraid?’

If the answer is yes then consider:

  • Exiting the trade immediately.
  • Reviewing your trading rules.
  • Reducing the size of your trade.
  • Review and continue with the above.

2. Do not keep checking your profit and loss during a trade

Add this to your trading rules, as this is a sign of anxiety, and also a cause of it! As long as you have a daily loss limit in place that will prevent extreme losses, you have no need to put yourself through the stress that constant checking brings.

3. Take a break after each trade

Focus and concentration are vital elements a trader has to apply, but science has shown us that this is exactly what we lose if we do not give our minds a break. Exercise your willpower and add in a break, even if it is just for a minute. Here are some suggestions to consider:

  • Walk away from the computer – no surfing or emails.
  • Make a drink or snack – your brain needs fuel to function correctly, so ensuring you take breaks to eat and drink is vital to overall health.
  • Go for a walk – studies have shown that spending time outdoors, even on a balcony, is beneficial.
  • Do some deep breathing exercises.
  • Do some stretches, useful if you’ve been sitting for an extended period. Especially give your eyes some loving care. A simple exercise is to look away from the computer and focus on an object around 20m away for 20 seconds.
go for a walk

4. Got a problem that is not going away?

Distraction is a powerful tool. If you have an issue that is going round in circles, try focusing on something else, like a crossword or reading an article. A distraction allows your mind to rest a little, and then you can come back and reassess the problem with fresh eyes and increased energy and motivation.

5. Trade when the markets are volatile

When the price action is volatile, that is the best time to implement your trades. Take a break during the least volatile trading times, and experience less frustration if you avoid trading when the markets are relatively static.

6. Stop trading after three consecutive losses

This should be part of your trading methodology anyway, so if it isn’t, add it in. Consecutive losses are known to initiate bad decisions like vying away from trading plans, over-leveraging and over trading. No one likes to feel like they are taking a loss, but you will need to get your head around the fact that it happens in Forex trading! Don’t let it become your roller coaster ride, plan for it, and avoid the negative impact it can have on you psychologically and financially.

7. Daydream!

No, not imaging making the trade of the century – just let your mind wander where it will. You are not wasting time, but allowing the space for any ideas lurking in your subconscious to drift up to the surface. Who knows what will appear? Taking breaks is not about being lazy or avoiding work, it is about looking after yourself and keeping your mind and body in tip-top condition. Getting off the rollercoaster is also about achieving your goals and ambitions, but just taking a slower route and enjoying the journey.

Conclusion

Trading in Forex is not for everyone, but as with any job, adaptations to work take place over time. With Forex, you can start with demo trading on the platforms, and this is an excellent way to assess yourself and get an indication of how you respond to trading situations. Of course, without the element of risk that is your money involved, it will be less of a stressful experience than the real thing, but you will get some idea if your personality is inclined to respond positively. You also get the chance to implement some of the strategies discussed above and see how they work for you.