Online trading mixes different feelings like joy and fear usually in short intervals. When you trade, one of the key ingredients is the ability to always hold your nerves and remain cold-blooded. Instinct and intuition are important but emotions could be what affects those and confuse you from making the right decisions.
Never be overwhelmed by emotions! This is the best advice that 70Trades can give you in order be profitable. This is very important especially when you start trading with a difficult emotional situation, because if you are not calmed after a trade that has not been successful, this can automatically lead to an impact on your next trading operation.
The online trading is aimed primarily on three factors: the broker’s experience, intuition, emotional control.
It’s important to balance emotions and rationality says 70trades
The market is ruled by rationality…. But emotions play a huge part. It’s a concept widely discussed in the context of economic theory and is often used in many neoclassical approaches. It busts the myth of the rational man, that knows how to perfectly dominate the emotional sphere and has been shown that emotions can be the difference in the market. The important thing is to be aware of the risks, whatever your style is.
How to control your emotions in case of a loss
You can’t win every time, you need to remember this always. Anxiety can take over and fear usually leads to irrational choices. So, how can I control my emotions in the best way?
In case of losses, for example, it is possible to intervene with at least two elements with a great impact on your self-control and your wallet:
How much risk a decision maker should take in situations where uncertainty is present? The answer is Money management!
The money management is the strategy that implies a capital management over time. No matter the level of trading experience, and regardless of the type of operation being conducted, you decide to leave the capital in several operations of small amounts. It’s obvious that the trader’s emotions in this case is more measured, since this strategy allows to reduce any losses in the event of erroneous forecasts due to the breakdown in several operations, without giving up to realize profits.
The second strategy is the “stop loss” that allows the brokers to close open positions early. This strategy can be used if there are market changes that may affect a different result than your forecast.
How to manage and control emotions in case of profits
When profits are accumulated and capital increases, you get feelings of joy and excitement. This leads to greed most of the times. We want more and overconfidence can push traders to open more (dangerous) positions. It’s important to have good control and management of emotions even if the results go beyond all expectations and realize higher profits than expected. This is because the trader could perform not lucid operations, because it could be driven only by the excellent earnings achieved, losing sight of the trend change signals and the changes in the market conditions.
To avoid this, it’s important to create a trading plan or daily planning strategies on the online trading operations. This will make it possible to fix all the operations to be performed in a given period of time, the minimum and maximum levels of profit and loss in order to guarantee a balance over time your capital.
Simple daily exercises and habits that can help you
To take intelligent decisions and in line with your long-term goals, you will want to keep an eye on these 3 aspects:
- The sleep. Scientific studies show that sleep a few hours per night leads to experience less weight loss, and at the same time pushes beyond measure to emphasize the positive results.
- Exercise increases oxygenation of the brain, which helps our mind to think with greater clarity.
- Scientists recommend to start each day with a healthy breakfast, then continuing to eat at regular intervals to better manage their insulin and glucose stocks.
Conclusion? Maintain the distance! According to 70Trades it’s important to keep an emotional distance before opening a position, you need to identify the strengths and weaknesses of your personality. In addition, several instruments such as money management or stop loss allow us to make a rational choice and avoid let ourselves from emotions.