Mastering Emotional Control: Insights from Professional Traders

By | June 27, 2023 4:04 pm

Emotions play a significant role in the world of trading. Fear, greed, and uncertainty can influence decision-making and potentially lead to poor trading outcomes. Professional traders understand the importance of emotional control and have mastered techniques to manage their emotions effectively. In this article, we will explore valuable insights from professional traders on how to master emotional control and improve trading performance.

One of the most successful trait of Professional traders have is ability to control their emotions. So Lets discuss today how an amateur traders can also acquire skills to control their emotion in the heat of moment when quick decision needs to be taken during trading .

Use Your Brain

I definitely think every trader struggles with controlling our emotions from time to time, And it is a choice – either you control your emotions, or your emotions control you.I have seen traders getting angry and breaking thing with loss of 10000/- and have seen trader who made 1 lakh in single day completely relaxed and showing no sign of excitement having total control over himself. The difference between them wasn’t their account size either – it was in their minds.

Mapping a Path to Profits

I suppose the simplest approach for getting to where you want to be is that you seek to build that control over time. There’s a natural tendency to treat trading like watching a horse race and get excited or upset, depending upon the outcome.

However, the best traders have found the boundaries of their comfort zone, and they stay right on the edge of them. They know before they put on a trade what the worst-case scenario , and they proceed with the trade with that in mind, able to accept it if it happens. They stay within their risk limits by doing so. Further, they know that if they put on too much risk, they’ll not only lose more than they should, but they’ll likely make some poor choices along the way by focusing on the loss rather than making the best decision at any point along the way.

A professional trader is able to think clearly from start to finish, and while there may be some mild irritation (enduring pullbacks), minor impatience (if the position stagnates), or slight satisfaction (as the trade begins to work), they avoid letting those emotions drive their behavior. They truly do stick with their plan, making modifications to it not on a whim, but only when absolutely necessary.

Set Realistic Expectations

Maintaining realistic expectations is crucial for emotional control in trading. Professional traders understand that losses are inevitable and part of the trading process. By accepting this fact and focusing on long-term profitability, they can avoid being overly affected by individual trade outcomes. Setting realistic expectations helps traders stay grounded and maintain emotional balance during both winning and losing periods.

Stick to a Routine

Establishing a consistent routine can contribute to emotional stability in trading. Professional traders often follow a structured schedule, including regular market analysis, trading journal maintenance, and self-reflection. By adhering to a routine, traders create a sense of discipline and reduce the likelihood of impulsive decision-making based on fleeting emotions.

Practice Risk Management

Risk management is a fundamental aspect of emotional control in trading. Professional traders emphasize the importance of setting appropriate stop-loss levels and position sizing. By implementing risk management techniques, traders limit the potential impact of individual trades on their overall portfolio. This approach helps them stay calm and focused, even during periods of market volatility.

Learn from Mistakes

Professional traders view mistakes as learning opportunities rather than failures. They understand that emotional reactions to losses can hinder progress. Instead of dwelling on past mistakes, they focus on analyzing and learning from them. This mindset shift allows traders to grow and refine their strategies, ultimately improving their emotional resilience and decision-making.

Develop Self-Awareness

Self-awareness is a key trait of successful traders. Professional traders regularly evaluate their emotional state and recognize how it can influence their trading decisions. By developing self-awareness, traders can identify patterns of behavior and emotions that may be detrimental to their trading performance. This awareness enables them to take proactive steps to manage their emotions effectively.

A Simple Solution

The best way to achieve that state of control is to chose to trade small enough that the outcome of any one trade doesn’t carry huge meaning. That will help to formulate a good habit of focusing on the trade, not the P&L (which is where emotions come from usually).

As you gain more control, you incrementally add more risk over time as you are comfortable, gradually increasing that comfort zone but not trying to achieve it overnight.

Develop good habits with small trades, and then slowlybuild your trade size along the way. If you strike the right balance between growth over time and clarity right now, you’ll be well on your way.

Category: Trading Education

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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