How To Overcome Trading Anxiety: As with most high-performance careers, trading can cause a lot of pressure and stress. Anxiety usually happens when you overanalyze every detail of your trading decisions to the extent that each performance turns into a subject of criticism. Unfortunately, this attitude often devastates general performance as the pressure to attain a particular goal can cloud one’s sense of decision.
Anxiety is a significant problem for traders, regardless of whether you are trading the Forex, crypto, or options market. Losing one’s courage can result in various issues, such as failure to enter or exit a system, too early or late exit, insecurity problems, and an ability to take an uncontrolled risk or avoid risk entirely.
As traders, we are always subject to the tension of making profits that we sometimes lose focus of the essence of sticking to the trading strategy or using the proper risk management. In this article, we’ll explore expert-proven tips that can help you overcome trading anxiety, and ultimately become a better trader.
Without further ado, let’s get right into it!
Top 7 Ways to Overcome Trading Anxiety
1. Build A Strong Trading Plan
A trading plan records the decision flow in your trading day and creates a clear draft. Having this plan enables you to maintain a cool head, which help eradicates the need to make an instant decision. This resolves the inner stress that causes quick and emotional decisions, resulting in long-term net losses.
Once a plan is set, it is crucial to strictly use, monitor, modify and assess it, as it must remain a live document to remain valuable.
2. Set Realistic Goals
Setting realistic expectations for yourself and managing your prospects whenever you’re making a trade help avoid being unnecessarily pressured. While envisaging the bigger picture is crucial, don’t be carried away with unrealistic goals. Having realistic goals will assist you in enjoying trading without the burden that comes with the struggle of making perfect trades.
There is nothing like a perfect entry or exit point, and there are various ways to estimate position sizing to make profits. Also, accepting the reality that you’ll lose at times is crucial to understanding how to trade.
Additionally, traders who constantly over-analyze every possible result of every decision and then waffle over which decision to take end up having undue anxiety with little, if any, optimistic results. Hence, avoid setting unrealistic goals and enjoy peace of mind when trading.
3. Eliminate Distractions or Move Away from Your Screen
Distractions are another thing that triggers anxiety in trading. If you tend to get distracted or anxious by the market’s price actions, avoid checking notifications on your smartphone or computer to prevent any form of distraction. If you continue, you will just put yourself under unnecessary stress.
Instead, take a break from the chat apps and news. With this period of “withdraw,” you can determine if your feelings are right or wrong. Getting rid of the undue factors that lead to stress in your life will assist you in dealing with trading anxiety more. It’s not just about easing stress but also about controlling the reasons that trigger it in the first instance.
4. Avoid Investing More Money When You Lose
If you have been losing capital and you keep investing more money with the hope that it will change your luck. Insensitively increasing your risk per trade is a fast track to disaster. Take time to be familiar with higher-risk trades and ensure your total risk per portfolio is still within your ease range. If your dealer permits you to limit position size and take smaller incomes, do so.
When people lose capital, it is normal for them to want to do something differently, with the expectation they will make money in return. But, notwithstanding, this could increase the pressure, even if you’re taking the same procedures. So, when you lose, don’t invest more money; instead, take time to re-strategize.
5. Focus On Process, Not Profits
Dealing with trading anxiety can be as simple as retelling yourself what’s necessary. Your trading experience will progress if you face trading with a positive attitude, enthusiasm, and beneficial approaches. The outcome will become subordinate to the process.
Overlooking that perfect trade may not be easy for some as this could be misunderstood as not ambition. If this is true for you, then it will be best to set goals on the process and not on your returns. You can create responsibility in your trading fast by giving yourself points for sticking to your plan, reducing your losses, or expanding your position.
Check your outcomes after every trading day, and ask yourself a few questions. Firstly, did you follow your trading plan? Secondly, when the trade moved against you, did you limit your losses or drive them? And lastly, how much risk did you take?
If the answers are yes to these questions, you serve a medal! So continue the good work and develop good trading attitudes, like using an effective risk management strategy or technique. And if you want to be perfect, focus on performing good trade/risk practices and processes appropriately.
6. Get A Life
When your world revolves around trading and the market moves against you, you may feel that your world is falling apart. This makes people with little else going on for them, particularly those who trade for a living, expressly vulnerable to anxiety.
So don’t put all your eggs in a basket. If not, possibilities are you will expose yourself to undue pressure or anxiety.
Instead, participate in adrenalin-pumping sports or get yourself an excellent laid-back hobby. Do stuff you will enjoy and offer you an outlet of fun for those periods when the markets move against you. Ultimately, don’t blame yourself for feeling like a choker, and let yourself be subdued to regular anxiety.
If you feel it surfacing, move away from the screens, relax and remember that there is nothing like 100% perfect forex trading performance and systems. Then, go back to the realistic goals you have set for yourself, and you’ll be amazed at how keeping to your goals can turn your trading around!
7. Select A Comfortable Risk Level
Every trader has their comfort level when talking about risk tolerance. A trader going beyond this comfort zone will undoubtedly cause nervousness and distress. Hence, a trader must remain within the boundaries of the risk zone to remain emotionally in control and avoid emotional decisions to get rid of anxiety.
If unsure of your risk tolerance, selecting a risk level on the lower side of your comfort zone is better until you have more confidence and expertise as a trader.
Conclusion on How to Overcome Trading Anxiety
Selecting the right trades and strategies can help you overcome trading anxiety. Start by knowing your goals and creating a trading plan or getting a few brokers supporting your trading technique.
Next, ask yourself, “Am I investing in a way that matches or goes along with my values? “And if that doesn’t work, we’ve got a lot of articles on our blog that will help.
I hope this article helps you find ways to keep calm and control. Cheers to good and profitable trading!