These seven simple tools can help you start taking control of your trading emotions. They cover aspects from your breathing, to your body. . .from meditating to journaling, and more. Perhaps, choose your favorite, and start working with it.
Tool 1–Become the “Clerk” While Trading
The Clerk is the part of you who should be executing trading orders from your trading plan. There are no decisions to be made, just a “clerk” following orders. If you are making rash decisions and thinking too much while trading, you’ll start to get into dangerous waters.
First, you need a solid trading plan that the Clerk can follow. It needs to be specific, clear, and understandable.
Second, choose to abdicate your role as decision maker over to the clerk.
And third, notice how often you allow the Clerk to trade and do his or her job, and how often you jump in and take control and change things. Ask yourself, “Who is taking this trade?” My clerk, my crazy person, or some other version of me?!
Tool 2–Use Belly Breathing
Start to notice your breathing several times daily during the trading day. Breath slowly into your lower belly, so it puffs out, and breath out again slowly. Repeat this a few times. It will have a calming effect on you physically and help bring your attention from your mind, into your body.
When we don’t breath fully, it affects our thinking adversely. Many traders I work with realize they have had little or no awareness of their body while trading. This tool is a first step to gain that awareness. (See Tool 3 for why this is important.)
Tool 3–Know Thy Body
Start to become aware of what is happening in your body while trading. This is a strange, new concept for many. But, it’s important. For some of the traders I suggest this to, it’s their first experience using a practice like this. But, they often find it surprisingly helpful.
You can practice this while trading, and also during other times in your day. Close your eyes for a minute and scan your body for discomfort, tightness, pressure, tingles, or whatever you notice.
The more awareness we have of our bodies, the more we can harness the messages our body is telling us. And, we can release anxiety, tension, and other feelings that otherwise impact our trading decisions.
For example, let’s say a trader had anxiety in his stomach from panic and fear, so he sells a stock prematurely to “get rid of” this feeling. The feeling, then, controlled his trade, not his mind.
Tool 4–Look for Solutions in the Same Place as the Problems
I once heard a parable of a man who lost his keys and was out looking for them under a streetlight. When asked where he last saw his keys, he replied they were in a different location than under the light. Why, then, was he looking under the light? Because it was easier to see there!
As traders, we do a similar thing. We try to solve our trading problems with easy solutions. . .with new indicators, bigger monitors, more charts, and so forth.
We look for solutions in different places than the problem lies.
Start to challenge yourself, asking “What is my REAL issue trading?” Explore this for yourself. “If changing my mindset / psychology was possibly the key to my trading success, would I be willing to examine this?
Do I ever even consider my mind as my challenge?
Starting to realize that your mindset is a key factor to trading successfully will put you ahead of the pack!
STAY TUNED FOR PART 2. . .!
Wishing You Awareness,
Andrea Wylan, MPH, CPCC
For your complimentary private consultation, please contact
Andrea at email@example.com or 619-665-7558.