Staying cool, calm, and composed amid uncertainty, ambiguity, and abstrusity can be preached by armchair critics, but when it comes to practicality and applicability, it is close to impossible. This is the life of any career trader, and for some part-timers too. Some traders are virtuous enough to handle these situations with profound sanity, while many succumb to the pressure and are prone to trading stress.
Why choose/stay in trading?
Despite all these animosities, many still choose trading over other careers. Part-timers can simply invest via hedge funds or investment banks and enjoy a comforting life, yet they chose to share the dread of sleepless nights. It is definitely not because of a lack of career opportunities; as a matter of fact, many traders have some spectacular skills that can turn on any employer. It is because thrill, chill, and sizzle are associated with trading.
The ecstasy experienced following profits can never be replicated by sniffs or cracks. This divine sensation is a trader’s honeymoon period. Once the sizzle runs out, cumbersomeness starts to kick in. A trader will then start to realize that he has to pay his mortgage and bills every month by going through all these hassles. A part-time trader who began trading because of his low earnings will also face cash crunch situations, despite putting effort into trading in addition to his day job. These are the typical scenarios of stress creeping into a trader.
How to identify trading stress?
Insomnia and stress are like Bonnie and Clyde, so sleepless nights are the best indication of any type of stress. Sudden mood swings, feeling disconnected from the surroundings, idleness, and laziness are the other predominant indications of stress. Watch out for the negative feelings and negative attitudes towards life too, as a failure in trading can be iterated as a failure in life by many. Some therapists now believe that sudden flu and digestive problems are stress outbursts. In a nutshell, trading stress can be identified by any change in the body, mind, or soul.
7 Simple ways to handle Trading stress
Calculate your affordability
The critical reason for trading stress is that the amount locked up as trading capital can mean a lot to a trader. A trader should know his worth and the amount of money he can afford to lose. Many traders misunderstand this notion and place a small stop loss for every trade, which results in a bigger cumulative loss. The loss-bearing capacity is usually 20–30% of savings. Therefore, the ideal trading capital is this affordable meager portion. Unfortunately if the affordable is afforded, it creates panic and leads to revenge trading at times. So it is better to take some time off and make a strict decision whether to continue trading or not. “Never go all in”—this can reduce the trading stress to a considerable extent. (Go through our article on how to avoid Forex losses for more details)
Workout – Body and mind
A good workout can take out the complacency and boredom in one’s mind and rejuvenate the desires and ambitions. A whole-body workout in a gym can increase the blood flow to the brain and re-invent a person, but not everyone will have a passion for it. The best substitute can be running, swimming, yoga, or any tough physical sport. Just a simple morning walk can ease one’s mind. A trader can also play games like chess or even sudoku to refresh his mind. These kinds of mental and physical exercises can make a person mentally tough to withstand stress.
Have a let out
A trader living in the city or suburbs should definitely mingle with fellow traders and make frequent trading contacts. Even if wisdom is not shared in those meetings, sentiment and experience will. It can be of great help when the market is going through a phase. When everyone makes a loss, the impact of your loss will subside psychologically. Furthermore, sharing the pain out loud with an understanding community can ease the suffering and bring peace of mind. If a trading community is not physically accessible, a trader can join online forums and chat rooms too.
Multitasking can be amusing at first, but it takes a toll on the body and the mind as the day’s progress. According to recent studies by many neuroscientists and psychologists, the human brain functions best when it is monotasking. Multitasking simply overloads the brain and shifts focus from one task to another. It decreases attentiveness and mindfulness, which in turn affect productivity. Just recall your experience of analyzing too many charts. You might simply navigate without focus, missing out on minute details. The best analysis made by you will always be the one in which you mono-tasked, i.e., focused your attention on a single chart for a prolonged period of time, plucking out the minute cues from it, just like an artist. It also satisfies your profound cravings.
Belittle your expectations until settled
A trader can definitely get carried away by the initial success and increase his commitments. It takes a lot of time, skill, and patience to get consistent payouts from the market. Until then, a trader should keep his commitments in check and grind his way through.
Spend time with your loved ones
Don’t shut out your loved ones in the name of discipline. Make a schedule for your loved ones within your tight schedule of trading. Stakeouts and makeouts with your beloved can’t be substituted with anything. It eases and refreshes the mind and brings the true self to the forefront. On the contrary, avoiding loved ones in the can even lead to stress many a time.
Learn to take it on the chin
Remember, there is no gain without pain, and the package of thrills and chills does include taking it on the chin. The losses are part of the package, and hence it is better to trade with affordable capital. The bearing becomes easier. But do analyze the mistakes and avoid them in the future. Take the loss as it is and move on to the next trade. Always remember, all it takes is one good trade to get back on track. So take it on the chin, just like a boxer, and wait patiently for the ideal set-up.
Calling it quits
A trader should always remember the reason for his trading. It’s for the thrill and the chill (and, of course, for the money too), but when the sizzle goes out and trading becomes a hectic job, it’s time to call it quits or seek professional help. Professional help can come from a therapist or even a trading expert.
Despite the fact that trading is one of the most stressful careers in the world, many take it up for the joy and ecstasy.
Choose the capital wisely, keeping in mind your affordability to lose.
Make it a routine to work out daily—for body and mind.
Associating with fellow traders and sharing their struggles and worries out loud lessens trading stress.
Multitasking can be a curse, and it can only increase trading stress.
Keep your expectations minimal and spend quality time with your beloved.
Learn to accept losses as part of the game.
“If you don't find a way to make money while you sleep, you will work until you die.”
- Warren Buffett
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