How To Control Your Emotions While Trading

EMOTIONS are our biggest battle, not the market, and as such, we have to first learn how to control them. The only way I know how to control emotions while trading is through a self accepted and trusted PLAN which includes the SL. 

Once accepted and trusted, we stand by our SL whether it is hit or not. We must have the DISCIPLINE to trade our PLAN no matter what the market is doing. So stick to your PLAN and do not change it in any way shape or fashion during the trade including your SL. If the market goes against you then it's just a loss, a part of doing business which you have already accepted in your PLAN.

When you have a consistent equity growth over at least 3 years and feel you have accumulated sufficient experience, patience, discipline and are in CONTROL of your emotions, then, and only then, can you consider monitoring your SL.

The deciding factor is CONTROL: Are YOU in control of YOUR emotions OR, are your EMOTIONS in control of YOU. I can tell you with 100% certainty that the first time you trade LIVE with your own, REAL hard earned money (not demo crap), your emotions will be in control of you.

I will say it again. Trading is not about charts, technical skills and your ability to read charts, it is about EMOTIONS (Fear and Greed). Learn to control these and you will be the success you dream about. Ignore them and you are doomed to the poor house.

Now, when you get to the stage that you feel YOU are in control of your emotions, you must still trade your PLAN. I very rarely interfere with my SL as I know, for me, it opens the door to my emotions and from then on, I am trading on emotions and not my PLAN. Learning how to CONTROL your emotions is far more important than learning your naked trading. "Did I read that right?", I hear you say? Damn right! Our trading psychology accounts for 90% of our success in trading.

I used to ignore all the psycho stuff as I thought it was PR to sell their books. As I continued to ignore it, the more I lost. It was only when I had been beaten up, turned inside out and hung out to dry with what was left of my stomach in my mouth many, many times, that I realised I needed to learn about ME and MY trading psychology.

I still struggle with this as I have shown in some of my posts but I am at the stage now where I recognise pretty soon what is happenning and who is in control and then get out of Dodge as fast as I can.

When you get to the point and the time that you feel YOU are in control of YOUR emotions and you feel you have the experience to monitor and adjust your SL, don't forget that it is a DOUBLE EDGED SWORD!

What I mean by this is that while you feel good that you may have saved yourself some $ by getting out of your SL early, it can also prevent you from continuing the trade, and maybe one which would turn out to be a 4 figure pip haul. Then how would you feel? I have lost count the number of times when I closed my SL prematurely only for the market to come within a few pips of my SL and then launch itself into outer space! I feel much worse doing that than saving a few $ by early SL closure which is why I don't dick around with my SL once set.