Three Ways to Control Emotions While Trading

As traders, there isn‘t just one way of being profitable. There are many strategies and approaches that can help traders accomplish their goals. But whatever is going to work for that person is often going to be a defined and systematic approach; rather than one based on ’hunches.

Here are three ways to feel more in control of your emotions while trading.

1. Create Personal Rules

Setting your own rules to follow when you trade can help you control your emotions. Your rules might include setting risk/reward tolerance levels for entering and exiting trades, through profit targets and/or stop losses.

2. Trade the Right Market Conditions

Staying away from market conditions which aren‘t ideal is also prudent. Not trading when you aren’t ‘feeling it’ is a good idea. Don‘t look to the market to make you feel better; if you aren’t up to trading the simple solution may just be to step away.

3.Establish a Trading Plan

In terms of fundamental factors, planning for various outcomes in the runup to key news events may also be a strategy to bear in mind. Compiling a trading plan is the first step to attack the emotions of trading, but unfortunately the trading plan will not completely obviate the effects of these emotions.