Emotions

11 jun 2023

It is impossible to have a prejudice every day.
However, it is possible to designate rules, models and criteria in order to exclude decision-making on an emotional basis.

Notice, research and record everything that happens before, after and during each of your trades. Pay attention to the time period when errors occur and analyze all the details: triggers, thoughts, emotions, behavior, actions, changes in decision making, changes in the perception of the market, opportunities or current positions, trading failures.

Before opening the next trade, remember your previous experience. This will help you avoid repeating old mistakes. The moments after the completion of transactions provide an excellent opportunity to track exactly how you came to this and what thoughts, emotions manifested in the moment. The recording process itself can also help to defuse the emotional state.

Your first goal is to reach a level of complete detail in your trading strategy. Continue to map out your behavior pattern in as much detail as possible until you identify the initial trigger and analyze it as part of your trading preparation. During a trading session, try to write down new details. After, combine and analyze your notes to better prepare for the next session.

Once you have identified the details associated with your trades, look for the early triggers that come before each one. You may be able to spot smaller errors or notice subtle changes in market perception. For example: you spend too much time on informational noise or make a trade that does not meet all the criteria of your trading plan.

Create a working day schedule taking into account the instrument sessions. Set up a timer so that it fires at regular intervals during your scheduled break and doesn't disrupt your work. During this time, take a few minutes to become aware of your thought process and understand how you feel. If there are signs of a problem, write them down.

Understand the intensity of the emotions. You may think that anger and frustration are two different emotions, but anger is just heightened frustration. Understanding how an emotion intensifies will help you recognize the details of your behavior pattern, including the original trigger.
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Have you ever faced a situation where, despite having a well-designed trading plan and a carefully crafted trading strategy, your actual trading day turned out to be completely unpredictable? In such instances, your actions deviate from the original plan, and momentary weakness casts doubt on the effectiveness of the entire trading session.

These unexpected emotions can catch you off guard.

One of the reasons for this is a lack of recognition of what is happening. Emotions often arise as immediate reactions or reflexes triggered by certain events, which traders often misinterpret as problems.

Let's consider the example of a loss from a trade. Many traders may become furious and enter positions without following proper trading patterns. However, this doesn't happen to everyone. Instead of expressing anger, some traders easily cope with failures, instinctively understanding the situation and turning it into opportunities. Therefore, a crucial aspect of developing a trading plan is identifying and addressing your own internal struggles, which serve as the underlying cause of the problem.

It's important to note that in many cases, the initial trigger for these emotions is subtle and barely perceptible consciously, yet it already impacts your mental stability and your habitual interaction with the market.

Even if the trading day starts off on the wrong foot, by regaining composure at the right moment and avoiding impulsive reactions, you can prevent basic mistakes and maintain control over your psychological state, ultimately improving your performance. The secondary arousal occurs when a trader becomes aware of or reacts to the impulses, thoughts, and actions that occurred initially. In simple terms, the mind and thoughts amplify the emotions that have already emerged.

In everyday life, people often don't differentiate between these experiences. However, if the source of the reflex is not identified, along with the secondary causes, finding a solution to the situation becomes challenging. Triggers will continue to generate more and more emotions that need to be managed.

Awareness of the initial impulse and the subsequent reaction are the two starting points that enable progress. After all, stressful situations can accumulate and overlap, creating a precedent for a cumulative effect.

Trading is a business, not a game of chance.
This is where it is important to keep a professional mindset while following the trading plan.

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✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes.

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