Trading Psychology: How To Avoid Burnout In Your Trading

By | February 19, 2022 2:03 pm

Last Week was an Emotional Roller Coaster Ride with Market showing wild swings both on upside and downside and can lead to or trigger burnout.

You’re losing more than you’re earning. You spend hours studying the charts only to see the trend you’re hoping to profit from work against you.

These situations and the feelings they arouse can accumulate and affect you mentally and emotionally. When this happens, you’re not just stressed. You’re burned out.

Burnout pertains to the collapse of the mind and emotions due to overwork or stress causing a lack of motivation.  The biggest misconception about burnout is that there is a single event that triggers it, but rather it is a gradual process that takes place over a period of time.  Trading is susceptible to burnout due to the many factors of excess stress: overtrading, extreme market conditions, unrealistic expectations, and losses.  When a trader experiences these types of situations and feelings over time, it can cause burnout if the suggested tips are not considered.  The one thing every trader should have is a strategy or a set of guidelines to follow to avoid mental and emotional stress.

What is trading burnout?

Trading is both hard and rewarding work. If it’s worth pursuing, however, expect to hit some snags along the way.

If you feel a sense of urgency or anxiety while trading, you’re experiencing stress. You’re exhausted. But only on the physical level. After taking a break, you’ll be right and ready to trade again.

Trading burnout, on the other hand, largely manifests itself psychologically and emotionally. You’re not just anxious but also depressed, resulting in detachment or withdrawal.

Rather than feel excited on the next trading day, you want to give up because you feel helpless and hopeless. You begin to question if trading is still worth doing. Even after taking a break, the same negative feelings and thoughts remain.

Between stress and burnout, the latter is more damaging. If not managed properly, you might not bounce back from it.

This is why it’s important to know if you’re way past feeling stressed, so you’ll know what to do to get back on the right track and recover your zest for trading.

Ways to avoid burnout in trading:

If you are at a point where you feel burnout on the horizon, take the time to ask yourself some important questions:

  • Are you beginning to question why you should care about your trading plan?
  • Do you feel a lack of motivation?
  • Are you fatigued throughout the work day?
  • Do you hold off a trade even though you know it is a losing trade?
  • Are you exhausted after work?
  • How much caffeine do you need?

First, minimize stress as much as possible, and try to effectively cope with significant stressful events. Don’t pretend that you don’t have stress. Trading is inherently stressful, but many deny stress rather than actively cope with it. But passively ignoring stress can accentuate the impact of stress rather than relieve it.

It’s better to acknowledge you are taking risks and that outcomes of your trades are uncertain. If you acknowledge the risk up front, and minimize it through risk management, you’ll feel more relaxed.

Second, it is essential to focus on the inherently rewarding aspects of trading. If you don’t love what you’re doing, you won’t last very long. Trading is inherently rewarding. It’s intellectually challenging. It’s fun to test personal hypotheses about the markets and see if your hypotheses are supported. Sometimes it’s easy to forget this fact, especially during a drawdown, but trading is fun, and it’s better to enjoy it than view it as a burden.

Third, cultivate a sense of balance between work and personal life. It’s necessary to focus all your available time to devising new trading methods. Becoming a master trader and staying there requires a large time commitment, and it may be difficult to balance work and leisure time. But it is important to spend time with friends and loved ones. It may be difficult to divide your time equally between your work and personal life, but you must devote some time to feeling connected to other people.

Fourth, it’s important to find personal meaning. Why do you spend so much of your time and energy trading? The answer to this question is significant. There’s no right answer. Some traders view trading as a way to support their family, and see their efforts as meaningful for that purpose. Other traders set aside part of their winnings for charity in order to feel they are making a greater societal contribution. However you answer this question, you must make sure that you find your efforts personally meaningful.

Here is a list of possible rules:

  • Not checking the market first thing in the morning.
  • Do not bring your work laptop/computer home.
  • No computer in bed.
  • No work on Saturday.

The goal is to not follow every rule, but rather select or make your own that works best.  The main point is to not let work control your life, and to discover a healthy balance.


To be good at trading you must fully understand and embrace the idea that it is extremely challenging and that you will lose money at it on a very regular basis. Once you internalize that thinking then you are in positions to develop a way to be successful at it. You can never take the market for granted. You always have to be on guard with the mindset that it is going to steal your cash if it is given an opportunity


Category: Trading Psychology

About Bramesh

Bramesh Bhandari has been actively trading the Indian Stock Markets since over 15+ Years. His primary strategies are his interpretations and applications of Gann And Astro Methodologies developed over the past decade.

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