Author: Chris Hood
Trading demons. We all have them.
Even after 20 years of trading, greed, fear, and impatience sometimes fly out as if someone opened Pandora’s box.
You would probably have thought I’d completely killed these by now.
But I’m no more a robot than you; emotions are part of the human condition. Our only hope is to manage them.
It’s precisely like the quote on courage that floats around.
“Courage is not the lack of fear, but the willingness to act anyway.”
The bravest men and women in the world are still afraid, just as the best traders always struggle with their basest emotions.
If you use these tips to manage them, they will be immediately reflected in your profits.
Corey Synder recently went live with Emmy Award-winning journalist Seth Allen for American Oil Fortunes to demonstrate precisely
how this one surprising stock could hand you a 1,000% return – or greater – over the next 12 months…
All you have to do is click this link to watch the replay of American Oil Fortunes.
The key to troubleshooting your psychology is to keep a trading journal.
Most of you probably already log the basics like entry date, ticker, price, and win or loss. However, take a moment to write down WHY you made the trade.
You should be able to answer that before you place it.
If you can’t answer that question, then you’ve identified a fundamental flaw in your planning and strategy – so work on them.
Just be honest.
No one will be reviewing these notes but you.
For example, if you placed a poorly planned trade just after several losses in a row, it may have been a revenge trade.
You wanted to get back at the market and recoup your losses quickly.
This is an emotional trigger that can destroy you.
The more information you put into your journal, the better you’ll understand how your emotions (and emotional state) affect your performance.
Make notes of your general mental and physical state each trading day.
Consider the following questions.
Did you get enough sleep?
Are you hungry, or have you just eaten?
If you’re accustomed to drinking coffee, did you have some or skip it?
Is your immediate environment distracting?
Did you have an argument with your spouse that’s stressing you out?
Are you taking any medications that could cloud your judgment?
As unrelated to trading as these might seem, all of them are relevant. They matter because they affect your psychological state.
And trading is 90% psychology.
Keeping records like this are at least as valuable as noting your entry set-ups or management strategies. You can even make rules around them.
Do you tend to lose much more when you haven’t gotten enough sleep?
Then either make sure you get enough or avoid trading when you’re tired. Sure, you might have to skip a day in the market.
Don’t think of it as missing a chance to make money.
Instead, reframe it as avoiding potentially costly losses.
No one can do this personal work for you; it’s completely introspective. For the novices, get into a habit of this right away. And if you’re an experienced trader, this might be precisely what you need to level up your profits.
PS – My colleague Corey Snyder recently went live to talk about the future of oil and revealed over a DOZEN critical stock plays to make right now if you want the best possible chance of harnessing the $15 Trillion market shift…
Including the one stock that’s perfectly positioned to deliver a potential return of 1,000% or more over the next year.
This broadcast will only be available for replay for a limited time, so watch now.