Trading Psychology: Five Psychological Tips for Trading Success.
In spite of being an exciting experience, sometimes, trading stocks can also turn into an utterly stressful one. Fear, anger, anxiety, incertitude, these are sensations that traders commonly feel.
In order to avoid the terrible consequences of stress and have full control of the situation, it is important to be mentally and emotionally prepared. In the lines below, you will find five easy-to-follow techniques to have a proper attitude towards stock trading. Some of these techniques are very simple and can bring immediate results, but some others are perfectible through practice.
- Tip No1: avoid getting out of control.
Smashing your PC on the floor or destroying your desk will not help you to solve a losing trade. It will just make you waste your time, and you could miss dozens of profitable trades since you need to fix your equipment.
If you can control your emotions, you will become a calmer and cooler person, which will bring you more opportunities.
- Tip No2: do not constantly “Dollar watch”.
Traders repeatedly watch the value of the dollar and they associate this with the lost or the profit of a trade. This is a potentially dangerous habit due to the fact that the emotional fluctuations that are related to “Dollar watching” can cause a psychological breakdown. Instead, you can use platforms like CMC Markets, where you can find tracking alerts that will make things easier.
- Tip No3: do not track your performance so as to trade.
Do not focus on your good or bad performance during the week, or the month. Instead, you must trade only when you consider that the opportunities and the market conditions are the best to get huge profits.
- Tip No4: always use the same amounts for every trade.
If you feel emotionally unstable, it is better to use the same amount for every trade while you recover your composure. This way, you will not be distracted by a trade with a big capital allocation.
- Tip No5: relax and take a break.
Get out from the stock markets for a while and go for a walk. It sometimes helps a lot to analyse the situation and obtain new ideas and elaborate new strategies. When your mind is relaxed, it certainly works much better.
There are still many other issues related to trading stocks, but if you follow these steps, your future trades will be more accurate and, in consequence, your profits will rapidly increase.