Trading can be a fast-paced environment which offers many potential rewards for new and experienced traders, however there are also many potential pitfalls. There is no getting away from it that profitable trading takes time and dedication in order to reach a level of consistency which bolster the account. Along this path there are many, many hurdles and worst still, many of those hurdles can be self-imposed.
There is a saying that “traders are their own worst enemy” and sometime when a trader has started on that path and downwards spiral of declining confidence and increasing self doubt, it can be very difficult to get away from there.
Whilst stress is an inevitable part of trading, trading doesn’t need to be overly stressful. There are certain steps that you can take which help ease stress when trading helping traders stay in trading for longer and hopefully help turn a profit.
- The Trading plan
You must have a trading plan. But do you? If not, then you are missing out on the first and most important step towards stress free (and potentially profitable) trading. Whilst most of us know that we need a trading plan, all to often traders do not make one. “He who fails to plan is planning to fail”. This adage could not be closer to the truth when it comes to trading. Without a trading plan you are likely to get stuck very quickly. You are relying on guess work and luck. The trading plan defines how, when, where and why you will be trading. This naturally removes the stress from trading. If the plan says don’t do it, then don’t do it.
- Define Loses
This falls under the umbrella of the trading plan but is so important that it should have a section for itself. Define the losses for your trade. Know how you will set your stop loss, which market tools will you use to define your stop? Knowing what risk parameters, you are prepared to accept helps you to become less anxious about them.
- Set it and Forget it
Not just stops now, but price targets as well. Set the orders and walk away. Trades do not need to be micromanaged on a second by second basis. In fact, little good has ever been achieved by staring at a screen watching your trade fluctuate. This is the most likely way to draw in your emotions and start to trade emotionally rather than sticking your plan. Watching trades fluctuate is stressful, this is when fear and greed start to take hold and direct your trade. Stepping away, knowing your risk which has been predetermined is not stressful.
These are just three simple pointers which can make a huge difference to your trading and the level of anxiety that is felt when a trade is running. Follow these steps and it is also guaranteed that you will notice a difference.