Useful day trading tips in a lesson of trading psychology

Five strategies to help us deal with stress and improve our trading psychology

We all know that trading is very stressful. Watch our latest Trading Psychology video where we share with you five tips to improve your trading.

Trading psychology – day trading tips

Hi there! This video is going to share with you five tips to improve your trading. Now, we all know that trading is very stressful. So, now let’s look at some strategies to help us deal with that stress and improve our trading if we are struggling. We all need stress, obviously, to motivate us. But we do not want to avoid all of our stress in trade, we just want to be able to cope well with it and to be able to improve. Now, when we’ve had a losing run or a heavy loss, the first reaction that you’re likely to have if you’re anything like me, is a combination of disbelief and anger. It’s a very emotional response. Now, we don’t want to just repress these emotions, to act like they’re not there when actually, these emotions drive our behavior and they can cause us to react and sometimes we might just want to jump straight back into the market to get back our losses. I don’t know if you’ve ever experienced that, you would not have had to have traded for very long, to have experienced that desire to strike back. And we might look for the first half set up we see, prices are at the weekly support level, so we just put in a buy or maybe price has spiked 40 points on the Euro/US Dollar pair, so we just jump in. These kinds of actions are almost entirely emotional responses. And it’s just part of our fight or flight part of our brain, the adrenaline surges through our body. We’re just in a panic mode, angry, emotional. And when we’re in this state, we’re highly vulnerable and liable to make really poor decisions. You know, you could lose months of hard on profit in a moment of madness, and many traders have done that. Except it is not madness, it is just emotional reaction and it’s understandable.

So the first step in dealing with this is to recognize when you are actually in this state. Virtually, all traders will recognize this state and virtually all traders will be able to share stories of how these trades affected them. You need to move out of this emotional state of mind into kind of an acceptance mindset. You know, you let the loss sink in, you accept it, and now you’re ready to move on. A lot of these emotional skills come as you grow in confidence with your trading, the emotions become less as your competence increases.

So, five tips to improve your trading. Tip number one, record your thoughts and feelings at the end of each day. What are you thinking, how you’re feeling. Perhaps you had a heavy losing or a winning trade. Just write down your feelings. This action itself is a helpful mental exercise to help deal with some of these emotions and it’s important of putting a gap between you and your emotions. Just say, “I am feeling extremely happy because I had a winning trade.” It’s helping you to identify those emotions.

Tip two, accept that a losing trade or a losing round is temporary. Furthermore, realize that you can change it. Even if you’ve never been profitable as a trader, you can change that. Trading is very teachable, like any skill, like riding a bike. First, you fell off, didn’t you? But eventually you got it and you don’t even think about it. Trading is exactly the same.

Tip three, when you are in a very negative state of mind, which you will tend towards, during a losing streak, try to do some of the things that are positive for you. What are your strengths? What are the positives? What things can you control?

Tip number four. Get some rest. If you’re too tired, you’re going to burn out. Are you getting enough recovery time? Make sure that you factor recovery into your day. This is recovery for the nervous system, so maybe the gym is not the answer here. You will not have a definite rest. Sleep, time of quiet, perhaps try some deep breathing techniques, allow yourself a break. Why not break in between trading sessions? Don’t just hammer it, for, you know, 12-15 hours straight. Your performance will suffer and your energy will clearly fly.

Tip five, one of the worst things I find about trading, is that it’s a lonely pursuit. You can be trading at home, at your desk, pretty much on your own, without all those little people contact. So, why don’t you arrange to meet up with some local traders, form a group? If you’re on a forum or on a Web page or a Web site ask fellow traders, “Can we meet up together. Are you available to meet?” That’s a really good tip to help avoid some of the loneliness of currency trading.

The post Useful day trading tips in a lesson of trading psychology appeared first on The Diary of a Trader.