To be emotionally attached to a single trading is a very dangerous condition, because it often leads to wrong decisions and disastrous results. Most traders feel, however, regularly handelsbevis and it causes them to lose money, even if it could have been avoided or at least limited the loss. The difference between a pro and an amateur is not professional, not gårni loss – he loses all the time – but he knows how to lose in the right way.
The following article explains why we become emotionally attached to the business, and how we can solve this problem.
Kampförsvaret is triggered when we perceive an external threat and as the name suggests, it us to be aggressive and fight or run away from the perceived threat. This primitive reaction is derived from our ancestors constantly were aware of the dangerous animals or hostile tribes that attacked them.
Kampsvaret caused by the changes in our bodies in order to be ready to take action. The nervous system makes our heart beats faster, breathing becomes faster and deeper, we may begin to sweat and our blood sugar levels and adrenaline up a level also increases. Even if these changes are necessary when you must be played with a dangerous animal such as ‘attacking you’ when it comes to making trading decisions can these reactions be harmful. You sit in front of your screen, handle a trade that goes against you, and sweat and you are breathing unnaturally – this will inevitably result in wrong decisions.
Are you tied to your trading?
Our daily lives, ”and our social relationships are a good thing and helps us to link with people, make new friends and have a good family life. In trading is the annex completely inappropriate.
When we are linked to our trade, we will stop to make rational and sound trading decisions, emotions take over and our decisions will be impulsive. In addition, evaluating and, we process more information in an inferior manner. When traders are attached to a trade are looking for confirmation to stay in a losing trade longer and reject the signs that it is time to pull out. All of these factors interfere with our ability to make objective and rational decisions about the market, the charts and our trade.
Signs that you are tied to a trade
Our language and thoughts is a very good indicator – it determines whether we are taking trading decisions objectively and according to the plan, or if we are connected to a trading.
When you say that you hope that the price reverses, it is then a clear sign that you should not be in the trade you are in.
Extreme and very emotional words and phrases is another sign that you are on the wrong track with your trading. Phrases like ”the Markets are crazy … Ahh, it’s hard out there … volatility is killing me … I killed the trade …” are terms used by amatörhandlare, while the professionals are neutral to the trade, and objective. Even if our brain is a fantastic machine, it can not distinguish between real experiences and imagined experiences. Even more interesting is what we say and think we see (or expresses through language), manifests itself often in our documents.
If you are in a lost position and you ask for other people’s opinions, you are looking at the web and read news articles, or trying a different set of indicators to confirm your trade deviate you from the plan, and your decisions will not be rational and objective.
”You’re as good as your last trade” is a dangerous state to be in. When you feel great and confident after a win and depressed, sad, or frustrated after a loss, it shows that you are committed to a trade. The outcome of a single trade is absolutely insignificant in your handelskarriär.
What is the solution for a trader?
A trader that is emotionally linked to his trade (solo) acting in a process-oriented line of thinking and does not assess his abilities or his systems ability through the result.
It is important to understand that you will always experience emotions in a certain extent, and that you can’t avoid feelings, but nonetheless, you should not make impulsive trading decisions even when under pressure or when you manage a position that goes against you, you should evaluate the situation objectively and make rational trading decisions, based on your trading plan.
A cyclist who loses a contest can either feel a failure and be depressed, or can objectively analyze what caused him to lose and improve himself for next time.
Golf is another good example. Professional golfers focus on the process in a single shot, rather than on the potential outcome they desire. By focusing on the shot, they see that they comply with their procedures and thereby achieve the best possible shot without thinking about the consequences of the result.
When it comes to trading have a trader see that he is performing a good analysis and create a good and well thought out trading plan before he enters trading. By ensuring that he is prepared for all events and has done his due diligence, he can be sure that he did everything to the best of his ability.
A trader can achieve a more professional train of thought by going through the following 7 steps.
1) Check your language
Do you use words or thoughts that means that you are hoping for a certain outcome, or are you using very emotional words? Observe yourself in order to get a sense of what affects your condition and your trading decisions.
2) not suppress your feeling
To suppress feelings is not only counterproductive, they should not be your goal. Even if you’re still experiencing the feelings, it is important that you remain in control of your actions and not make impulsive trading decisions. Write down your feelings in your handelsdagbok.
3) You are more than your last trade
Even if you have self-esteem and self-confidence in your method, it is very important to let your ego get out of your way when you make your trading decisions. As we said before, focus on your thinking and be prepared for all events. But then, do not judge your abilities based on the results, and think in the long term. A single trade does not mean anything in a merchant’s life.
Some traders report that they meditate or use other relaxation techniques like deep ”stomach-breathing” to deal with anxiety or stress. When you notice that your emotional state changes (fast breathing, you start to sweat or feel hot), is kampsvaret about to take over. Then go away from the desktop to cool off and relax to avoid impulsive handelsmisstag.
You can listen to relaxing music. You should also check your trading environment, and eliminate disturbing factors.
5) do not Look at your P & L
To constantly look at your P & L is a very bad habit that has a significant impact on how you make your trading decisions. When you see that the price goes against you in a winning trade, and your P & L goes down, it is more likely that you close your trade too early, but there are no clear exit signals.
Focus on your charts and what you can objectively observe. Always monitor with your trading plan to avoid impulsive trading decisions.
6) Avoid subsequent
Focus on the present and not the past or the future.
The longer you ‘live’ in the past, the less future there is to enjoy.
7) Have a balanced life
Trading should not be the bulk of your life since negative handelsresultat will lead to low self-esteem and depression. To have hobbies and have a good family life will help you to go through the bad times, in a simpler way and put the trade in a different perspective. People who have their regular job and trading part-time, often find it easier to cope with the emotional aspects of trading because they are not dependent on their handelsresultat.