If we were to think about what our ideal relationship with the markets would be, it would probably look something like the following: a stock reaches our entry point, we implement our trading plan, we wait it out and then collect our profits.
It sounds nice doesn’t it?
We may sometimes experience this ideal version of the scenario, but unfortunately, we often don’t.
Keep Your Emotions At Bay When Investing and Trading
Whether it is for some unknown reason or an unexpected occurrence, when we get thrown off track, it is easy to become upset and our perspective may become blurred. We have all experienced the frustration of not being able to concentrate and the resulting difficulty in understanding even the simplest concept. When this occurs, we have surrendered control over our emotions and this can lead to costly mistakes. Reclaiming our control is essential.
If we were perfect, we would always be operating with a serene, focused and clear state of mind.
Even distractions won’t take us away from the task at hand. The reality is, however, this isn’t always an easy state to achieve. A good part of the time it is because we are tired, hungry or something is making us physically uncomfortable. We can’t be at our best without getting enough rest, eating well and staying as healthy as possible. These factors may not be the only reasons for why we make mistakes, but they do play a significant role.
The ideal trader loves what they do. They trade for the joy of it, not just because of the money. Of course, not all of us can muster that amount of enthusiasm nor can we all say that the money isn’t at least part of why we are doing it.
Be Wary Of Falling Into Victim Mentality
We all have things about trading that irritate us. For example, perhaps we don’t have a lot of capital to invest, yet we have to make the best of what we do have. Maybe it’s that we want to be able to trade without getting too worried about outcomes, but we know that at the end of the day we still have to pay our bills. For some of us, it could be that we enjoy trading to an extent, but we really want to be able to do something different like investing in real estate. Whatever it is that irritates us about trading, it does serve as a distraction and can impact upon how we trade. By always having these types of thoughts in the back of our mind, we may begin to take on a victim mentality. We wonder why things don’t go our way, we wish we had more money to invest and may even think of giving up on what we feel is an unattainable goal.
So, how can we address this? My first suggestion is to realise that it is not realistic to think we can completely do away with what bothers us about trading, but we can make it have less of a negative impact. We also must understand what it is exactly that irritates us about trading. If it helps, write a list. When looking at that list, we can recognise how significant the issues on that list really are and realise that while they may be annoying, we enjoy trading more than those issues annoy us. When we have done this, it will have less of an impact upon our performance.
It is true that sometimes, our emotions can sneak up on us. We may believe we are feeling calm and then, out of nowhere, something comes along and throws us off course. This will happen, but if we take care of ourselves by getting adequate rest, eating properly and addressing any emotional issues that linger in our mind, we can more easily overcome challenges and become more profitable.