Unstable Market – Stable Emotions

The past couple of weeks in the market was a harsh reminder of what the market can do to one’s focus and emotional stability.

For my particular trading style the past couple of weeks were challenging. The sharp unexpected swings in the market to moves losing steam and flat-lining…these absolutely frustrate me. It’s fine if you’re following your rules, as I was, but it can get ugly if you let your emotions get the best of you.

Fortunately, I didn’t lose my cool (though I came very close). There was a day last week whereby I couldn’t get a read on the market at all and had a few loses in a row. I felt the frustration building up in me and thankfully was very aware of it bubbling up. This is key for any trader – knowing to recognize when your thoughts and emotions start to take a turn for the worse. Learning to recognize those feelings or physical queues in yourself is important so you know when to take action to stop it and avoid making bad trading decisions.

So once I recognized my personal “red flags” popping up I made the conscious decision to stop trading for the day and to walk away. I physically walked away from my computer, took a walk around, and allowed myself to calm down. Then when I got back to my computer I put the charts out of view and started browsing some of my favorite sites just to further disrupt the negative feelings I was having so that I could get back to my proper trading mood. Once I was feeling back to normal again, I started looking at the charts trying to see what I could learn from my earlier trades.

Being able to walk away, whether it be physically or mentally, is an important skill to have for trading survival. You can always come back and fight another day.