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If you’re struggling as a trader, chances are, you’ve noticed certain parts of yourself that “sabotage” your trading. You may have noticed impulsiveness, anxiety about pulling the trigger or while in a trade, a desire to gamble, or wanting perfection (perfectionist). Once you notice these things, most people try like crazy to get rid of that part, or ignore it, or try to shut it up while you are trading. How is that working?

It doesn’t work, right? That trait is a part of you, and you’d actually be a much better trader if you integrated that part of yourself into your trading, not try to shun it.

You also may be trying to implement a strategy, but you can’t seem to quite do it. For example, you’re supposed to hold winning trades to a certain target or exit, but you lose your nerve and always seem to be exiting early at inopportune times. This means your skill doesn’t quite match what the strategy requires. That’s ok, as you can adapt strategies to your current skill level and work on incrementally improving over time.

Stay in Tune With Your Emotions

While I trade I try to stay in tune with my emotions and my “current skill” constantly. I admit what I am feeling and where I am at, and trade accordingly.

I still follow my strategies, but I have rules that allow me to adapt. We can only trade as well as our current faculties allow. This may change from day to day. I always trade within my own limitations.

For example, if I’m feeling a bit anxious while trading I allow myself to use a trailing stop loss. This gives me more peace of mind, and is likely to produce some profit compared to forcing myself to hold till a target my current mind frame will likely mess up. Basically, if I feel like it will be a struggle to follow my typical strategy, I have rules that allow me to make small changes in the strategy in order to accommodate my current mental state.

Those changes are not made up on the spot. I sat down and thought about (because I have experienced it) how I would handle myself if I feel anxiety (for example) during a trade. In the moment it might not be possible to fully get rid of that anxiety, yet it will definitely affect my trading. So I came up with rules that allow me to still trade and follow a set of modified rules if I happen to feel anxious while trading.

I am really angry, I have to step away till I cool down. This is also part of my plan; I basically have to adapt my trading to myself at a given moment. This is another form of adapting and integrating my emotions into my trading. Even if a valid trade comes along, I can’t trade it while angry. Why? Because I am more likely to mess it up. I need to calm myself first, then I can go back to trading my strategy.

What if you tend to gamble? or get impulsive? or your perfectionist never wants to take any trades (or gets angry at losses)? If these things are happening regularly, it probably won’t stop over night. Come up with rules to minimize the damage. These types of issues are prime candidates for a practice called Parts Negotiation. This is a practice of integrating these parts into our trading, not shunning them (they aren’t going anywhere, but if you shun them they will pop up at inopportune times).

These parts can all be powerful allies if given direction. If we accept our gambler they may be able to show us how to utilize our strategy but also capture the odd homerun (what the gambler is often after).

The perfectionist is a great ally in strategy creation; focus that part of yourself not on results but on perfection-of-process. Impulsiveness can also be integrated into a strategy; I day trade a one-minute chart because I want action. Quickness to act forged my trade exit rules; I accepted I didn’t want to ride wave after wave of price action on a single trade. I want to hold for one major move and then get out when it ends.

With my passive investing, I can buy at any time each month, and my impulsiveness is given free rein to make my purchases within the confines of the strategy. It’s included, not excluded. If I exclude it, it’s still there, and it will sabotage me.

Stay in Tune With Your Trading Skill Level

The same thing applies to skill level.

If it is hard to hold a trade to a full target, try reducing the target or holding it for an amount of time you can manage. Then each week increase it incrementally.

With day trading I often use a 2:1 to 2.5:1 reward to risk. With swing trading I go for 3:1 to more. This is what I have found maximizes profit on most moves/trades. But when you start out trading you may not be comfortable with that, and actually end up messing up trades because your uncomfortableness takes over and gets you out at non-ideal spots.

If that is the case, and you continually force yourself to try to hold, you will probably abandon the strategy before you ever get good at it. Try holding till a 1.5:1 target, or less if you have to. Then work up to 1.6:1, then a week or two later 1.7:1.

Train yourself to run a smaller distance before you try running the marathon. If you can’t hold for small targets, you can’t hold for bigger ones. Trade where you are at, then slowly increase to reach the goal (and possibly beyond).

If you’re missing trades because you’re scared to lose, use a trailing SL on it or reduce position size till it doesn’t matter.

The point is to trade where you are at, and then work to increase your skill and mental thresholds. Accept that you may not be able to trade a strategy exactly as described…yet. Take the strategies and trade them within your limitations. Then slowly expand your limitations through practice and mental work to get better at implementing the strategy as it was originally designed.

Trading With Acceptance of Emotions and Skill Level is Less Stressful

Absolutely work on limitations and problem areas outside of trading. During trading hours, accept who you are in this moment, and accommodate for it in your trading plan. This tactic has been working great for my nearly 20 years of trading. It’s when I ignore what I am feeling that I tend to struggle.

If your goal is to trade one of my strategies, realize that implementing it as laid out is essentially the “end game.” That’s where I have gotten to after loads of work on myself and these strategies.

If you have lots of anxiety, or impulsiveness, or you can’t seem do what I do (yet), then come up with a plan for improvement. Use easier-to-reach targets, for example, and then lay out a plan for how you will slowly increase those targets over time as you get comfortable.

If you can’t handle two or three strategies, trade just one. If a certain emotion is “sabotaging” your trading, create rules for how to handle that emotion, which may require slightly different rules than if you are in a good state of mind.

Accepting my emotions keeps my trading calm and almost entirely stress-free. Most people try to brute force through their emotions or skill limitations. They mess up and fail.

Instead, admit you don’t currently have the capacity to implement a strategy fully (if you don’t), and come up with ways to make it work for your current skill level. This way, you can slowly improve over time, and will see profitability much quicker.

This is a way less stressful and much quicker path to profitability. If you are struggling, try it.

Give yourself the freedom to admit emotions and your current skill level. Be brutally honest. Back off your expectations until they meet your current skill level. Trade that way for now, knowing you can trade this way right now and follow your rules (a valuable skill to develop). Improve over time, but at least get good at following rules you are able to follow right now. Set up rules you ARE able to follow.

That may mean you make less, currently, than what the strategy offers in its “end game” form (which you aren’t able to implement, yet, anyway), but at least you will probably be making something. And you’ll be following rules you can follow, which is something to be proud of.

With practice and experience you can improve on your current results, eventually making bigger profits and having fewer issues with emotions (the more you integrate them, the more quiet they become).

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