There are 3 main emotions experienced by amateur and professional traders alike when a trade starts to go the wrong way. At some point in your trading career, you have probably experienced:
- HOPE – We hope the trade turns around and comes back from negative to positive.
- FEAR – Fear sets in while in a trade and we simply hope to break even.
- DESPERATION – We become completely paralyzed by the pain of loss which forces us to just get out of the trade regardless of the loss or state of the trade.
Regardless of your experience level, don’t let your emotions lead you to self-sabotage. Guard yourself while the trade is happening and stick to your trade plan. If things go off the rails, you should have your stop-loss in place to guard against financial catastrophe. While one off day doesn’t mean you should throw out your trade plan, it doesn’t mean you should stick to it either. We recommend you keep a careful log of all your trades and re-evaluate your trade plan if you see a pattern of many losing days one after another.
You will need to be comfortable with risk regardless of the trade you are taking. Don’t let your fear control you or lead you to change a trade while in progress. If you see something moving away from where you predicted it would go, it is best to wait to see how the trade plays out. Second guessing and changing your rules after entry is one of the most common mistakes made by amateur traders.
Trading can be stressful, especially if you are having a bad day in the markets. Remember to take a deep breath, listen to some music, accept that you cannot change the direction of the market with your mind and LET IT GO! Just because you have one losing day, doesn’t mean that you will never have a winning one.
Keep in mind that there are things you can control in life and things you can’t. What you can control is your attitude and sticking to your trade plan. This consistency will allow you take yourself out of the equation as a variable. By minimizing variables, you will achieve a more positive result overall, even if every day isn’t a winning day.