Emotions Are Part Of Trading - Accept It And Profit From It

emotional trader

I don't talk about it nearly as much as I should, but as traders we are constantly talking about the need to make our trading an emotionless endeavor. And I'm here to say that is frankly impossible to do. You can't get rid of emotions just as much as a zebra cannot rid itself of its stripes. Humans, unlike the animal kingdom, have emotions and feelings. Unfortunately, when it comes to trading they can easily get the best of us. 

Trading is setup to simply maximize all of your emotions and bring out the worst in you. 

Fist pump after a good trade.... emotion

Fist pound the desk after a bad trade...emotion

Nervous about the overnight futures....emotion

Cocky about one's ability to trade...emotion

Face it, whether you are a good trader or not, emotions are part of trading. The issue becomes when those emotions become unbridled during the midst of your trading. 

Let me give you an example. In your marriage, you get mad at your wife or husband at some point. Perhaps more often then you prefer, but that is normal. When you live in close quarters with someone, there is bound to be conflict. That is the emotional nature of humans when things don't pan out perfectly like we want it to. 

However those emotions have to stay in control, because the moment you start tearing down your partner verbally or physically, is when the emotions become unbridled and bad things start to happen, resulting in a lost marriage or the police escorting you down to the jailhouse. 

Now, I'm not trying to make apples to apples comparisons between domestic abuse and trading. What I'm trying to say is that when there are tense and emotional states, the key is not to ignore the fact that there is emotions involved or to let the emotions go unchecked. Rather the key is to acknowledge the role that emotions are playing in your trading, what kind of information you can glean from them and finally what is the best response, while being fully aware of your feelings, and not letting them overpower prudent decision making. 

Journal your emotions, take a walk on the beach, think out loud while taking a stroll around the neighborhood - even pray about it. I do all of these things quite regularly. I was irritated on Tuesday, when the market gapped up and ran against my positions. They took me out of my two shorts I was in. I was 100% cash as a result of the two stops being hit and I knew that I shouldn't try to turn around and make a trade right away. Instead, I went to the beach, which is only 5 minutes down the road. I walked a couple of miles, and then jumped in the water and felt refreshed. I came back to my desk around lunch time, and was able to see the markets much clearer, and as a result, I have made up for those losses with a series of good trades. 

That is what you have to do, people. You have to be smart when it comes to your emotions because ignoring them is just as bad as letting them go unbridled. Find the nuggets of information in those emotions, acknowledge it, take a deep breath and apply it to your trading.

You and you're trading will be better off for it

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