Trading is a marathon not a sprint. Often time’s new traders allow one bad day to alter not only their trading styles, but their emotions as well. In order to be a successful trader, you have to learn to put tough trading days in their place. Do you think every game Michael Jordan lost; he then went home and changed his entire style of play. When Tiger Woods has an off day, do you think he immediately calls his swing coach to develop a new swing strategy?
Set Daily Limits
Have a maximum amount of money you are willing to risk per day as a part of your day trading activities. Base this number on your comfort level. If in the unfortunate event this number is hit, immediately stop trading. You can always get it back on another day. For example, let’s say you are comfortable risking $500 per day. But, then you break this rule and end up losing $1,500. How do you think this will make you feel? Set a number you can live with and forget about everything else.
Let It Go After the Close
Your family members should not be able to tell what kind of day you have had in the market. The biggest disservice you can do to your loved ones is taking them on the emotional highs and lows of trading. Don’t come down after a big up day and take junior out to purchase the Apple I-Phone and a PS3 to boot. Conversely, on losing trading days, don’t tell your wife that the family vacation has been unexpectedly canceled. Trading is a business and with all businesses, there are up and down periods. Just continue to work on being consistent, not only in the game of trading but your emotions as well.
Have a Life Outside Of Trading
One of the biggest misconceptions of trading is that the most successful people work at trading 20 hours per day. While there is some value in putting in the hours at a traditional job, trading does not fit that business model. The key with trading is not the amount of time put in, but the quality of time. So, after a tough trading day, don’t sit in your study or office until 11 pm trying to figure things out. Get out of the office. Take your kids to get some ice cream, spend time with your spouse, do a little community service. These outside activities will not only get you out of the house, but they will also rejuvenate your spirit for the upcoming trading day.
Learn To Pray
Prayer is the ultimate healing power. You have to learn to give your troubles up to whatever higher power you call God. This will allow you to release your fears and concerns. You cannot keep these emotions bottled up; it will ultimately eat your soul and trading profits. It has been said that traders often perform better when they say a quick prayer a few times throughout the trading day, asking God for guidance and direction.
Stay Physically Active
Depending on your trading style and personality traits, losing trading days can rack a real toll on your body. Take a quick jog in the morning or after the close. I personally like to lift free weights. Now, I’m no beefcake, but when I’m lifting the dumbbell, I can literally feel the anger, frustration, and fear leaving my body.
Trading can be a very isolating career. Many traders work from their home offices and totally lose touch with the outside world. On losing trading days, this bad habit is easily exasperated. This is why it’s important to make sure you call loved ones and friends during this time. Make sure you ask an old friend to catch the Monday Night football game or have one of your friends over to watch a movie. Now, this doesn’t mean you should turn all of your friendships into therapeutic relationships where only you benefit. Make sure that you don’t bring up your trading day during your conversations. Use this time with the people close to you to bring you back to reality about what’s important and trust me; your tough trading days won’t seem so tough after all.
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