Have you ever experienced an emotional roller coaster ride when it comes to trading the markets? In most cases, most traders have experienced this otherwise. The most common experience for an aspiring market participant is feeling a plethora of emotions before executing a trade; afterward, the trader cannot enact their well-planned transaction.
There are also other occurrences that a trader both undergoes a plethora of emotions before executing an unplanned or impulsive trade while also being unable to perform the said transaction. It’s a double whammy, as they say. The said situations are called Analysis Paralysis.
Despite all these similar events that transpire every day, many individuals still think that their system is their main problem. It seems that several traders do not value the aspect of Trading Psychology in their respective systems, thinking that it isn’t mechanical in the sense that it isn’t a buy and sell strategy towards financial assets.
It is a non-negotiable for aspiring market participants to heed their mentality when performing their trades. Experiencing the Analysis Paralysis is a taxing occurrence, and the solution to the said problem is quite simple, yet many find it hard to do.
Traders should plan their trades during cold hours or outside market hours. Moreover, traders should accept that we won’t grasp every opportunity in the markets as it happens every day. Once you have embraced these facts, you can avoid solely using unnecessary emotions in trading.
Discipline and patience also play a significant role in this step. The trader must follow their trading plan with 100% accuracy and the patience to enact their trades once the opportunity presents itself. The thinking and planning part of this endeavor must be initiated while the said market sleeps.
Besides mastering your strategy towards the markets, one must start from the premise that the solutions are in your head and not in the market itself. As the say, trading is 80% psychology and 20% methodology.
A market participant’s strategy is nothing if the end-user is perhaps afraid to execute their trades. One must see the financial markets from an objective perspective while eradicating unnecessary emotions that distort your trading methodology.
Then again, this is easier said than done. It is impossible to learn and accept these concepts right away. Trading the financial markets is a lifelong endeavor that requires an individual to commit their so-called deliberate practice or 10,000+ hours to this craft.
Managing their emotions will take time, but the individual must put in their conscious effort to apply the change. Individuals who accept the inevitable aspects of trading, such as the risk involved and the occurrences that we don’t have control, such as price behavior, do not perceive anything about the markets as unpleasant. To function as a professional trader, the said market participant must align their mental environment this way.
