Are your emotions out of control?

This might come as a surprise, but I believe the most important work that a trader can do is to learn to manage their mind and emotions.

Let me explain.

By and large, we are all driven by two main emotions – fear and greed.

However, as a trader, you are exposing yourself to these emotions in a way that others are not.

It’s relentless. And in the early days you will experience the extreme of one, if not both.

This is natural. It’s only an issue if you’re unprepared.

The under preparedness that this will be your experience is why so many give up within the first few months or year of trading.

I don’t want this to be you. I want you to have a long and profitable trading business.

And, for that reason, I’ve decided to write this short article.

Learn to observe your emotions

Easier said than done, but rather than having your actions and decisions dictated by your emotions, you need to become an observer of your emotions.

We can’t let our emotions affect our trading. We have to stick to what we have tested and keep ourselves in as level a place as possible emotionally.

Imagine, for example, your trade is in a losing position and nearly at your stop loss and in a moment of madness you move your stop loss to give that trade just a slight chance to still survive.

But as you do so, you watch the market continue to drop even further and stop you out.

You had a losing trade, you moved your stop, and in doing so you broke your risk parameters.

This is all too common, unfortunately.

Think of your emotions like a pendulum…

This might seem to go against what I’ve just shared, but greed can actually be quite helpful in the early days – it can get you to press that button, gain experience and put some skin in the game.

But in the long run it will be your downfall.

The same is true with fear.

Although fear may save you from taking some losing trades, it will prevent you from taking trades that would have been profitable. If you’re too dominated by fear, it will limit, or kill, your trading success.

Instead we need to bring the pendulum of your emotions, swinging between greed and fear, as central as possible.

That’s not to say that you become unemotional. It just means that you have systems and processes in place to limit the negative impact of your emotions.

If you have traded before, I want you to take a moment and think about what emotion you are more dominated by – fear or greed?

And how has this impacted your trading?

It’s time to become more balanced

Personally I find certain phrases useful for helping to keep my emotions in check.

“Focus on the process, not the goal”.

Have I executed my process correctly regardless of the result? If the answer is yes, I have traded well that day. If the answer is no, I have not.

So simple, yet transformative.

When I shifted away from focusing on the goal to focusing on the process, my trading improved and so did my results and profitability.

Another phrase I like to use is this:

“This is just one trade in my next 1,000 trades”.

Give yourself some perspective.

As long as you’re managing risk effectively, then you’re not going to lose everything by having one losing trade.

Focus your mind on the future of your trading career and don’t place so much emotional energy and meaning on one particular trade.

After all, it’s just one trade in thousands of trades.

Give yourself a break emotionally, step back and look at the bigger picture.

What does the bigger picture look like for you?

Is the bigger picture that you’re in this for the long term, not just a couple of trades?

If it is, then STARTrading is here to support and guide you towards becoming a safe and confident trader.

Have you joined our Facebook Community yet? If not, I’d really encourage you to do so.

This is where we host and share a selection of free and exclusive training videos, downloadable resources and our highly successful trading masterclasses.

And this is where we discuss the importance of mindset and managing your emotions in much more detail.

It’s free and only a few clicks away.

See you there?