Stress is a natural part of trading because there is always an uncertain outcome from every trade that you enter. The unknown is stressful, and it can be frustrating or even infuriating when things do not go your way. You may feel sad, happy, bored or any of a wide range of emotions while trading and it’s necessary to work with these emotions and not allow any of them to impact on your trading. One of the easiest strategies is to take a break from your screen, walk away when you become aware that you are tensing up, or any emotion is kicking in. If you trade intraday take regular breaks, and if you are an end of day trader, stop watching the markets during the day.
Constantly watching the market as an end of day trader is non productive and causes more stress than it removes, so stop it. You will get a lot more work done and you may be able to free up some time to dedicate to your trading preparation as well.
Preparation can reduce stress
Solid preparation is essential every trading day, but it has another benefit as well. It can allow you to reduce the stress that occurs by preparing and rehearsing the possible outcomes for today’s trades. A mental rehearsal means in some ways you have already lived through the experience, regardless of what the market throws at you.
Prepare for movement in both directions. If the market trends higher, what will you do? And if the market trends lower, how will you react to that? Also consider what you will do if the market is in consolidation, i.e. moves up and down without really going anywhere. This happens on most days so don’t assume the market will trend every day. By preparing in this way you are less likely to become stressed, because you are ready for anything the market is likely to deliver.
Exercise to release stress
Exercise is a key to releasing stress from your body and it is something you should find time for in your daily routine. Stress triggers your body to release adrenalin which is the fuel used for fight or flight. Trading can be stressful, triggering the production of adrenaline, but when you’re sitting in front of a computer screen you don’t use up this adrenalin, it remains in your body.
Regular exercise will ensure it is burnt off and will allow you to return to a calm relaxed state more easily. You could incorporate a gym workout, a walk, a run or a yoga session to allow your body the time to burn off the
adrenalin released by your body in a high stress situation.
Regular exercise can also provide you with more energy as your cardio vascular system functions more efficiently. Relaxation after exercise is also incredibly beneficial for your wellbeing – mentally, physically and even spiritually.
Social interaction for your own good
Social interaction can allow you to release any emotional charge that may have built up when trading. It’s wonderful to be able to share your successes with someone else and at times it’s useful to have someone to talk with to process some of the ideas that are running through your head. This can help you to find a solution to any challenges you may be facing. Full time trading can be a lonely occupation, because often you are sitting alone in front of a computer screen. In a work environment you typically have social interaction on a regular basis – even if you have little in common with your co workers, this still meets a human need.
Ensure you make time to meet with other people as part of your daily routine. If possible getting to know other traders in your local area is a great idea. Interacting with other traders gives you a chance to swap ideas and discuss trading problems with someone else that has market experience.
Continue to learn
Remember that learning to trade is a journey of 1000 miles and it begins with your first trade. Every trade is an opportunity to learn something new. Embrace the mistakes that you make and learn from them. If you can avoid just one mistake in the future it can make a huge difference to your trading results and reduce your trading stress in the future.
As your knowledge and experience improves you will be better positioned to cope with the ups and downs of trading. You also have the opportunity to develop your skills and the ability to cope with stress. Enjoy the ride, because the rewards are worth it.