How To Manage Your Emotions When Trading Forex
When it comes to trading forex, we are often met with extremes. Extreme emotional ups and downs. Extreme opportunities. Extreme pressures.
With all this going on, traders often become emotional – letting these extremes take control and succumbing to stress and anxiety.
As long-time traders, it’s taken us years to master the art of managing our emotions when trading forex. But, we’re here to tell you you can do it.
And this is how – it’s all about mindset management.
Only by controlling your mindset can you prepare yourself for the inevitable ups and downs you will face as a forex trader.
A great place to start when learning how to manage your mindset is by taking stock of your reactions to high-stress situations.
What do you do when something goes wrong? Is your reaction extreme? Or are you able to acknowledge the feeling and respond appropriately to the situation?
The latter is what you want to be aiming for. It’s incredibly easy to let our emotions take control, which puts us at risk of making poor decisions fuelled by those emotions. We need to strive for a slower, more mindful response – something that assessing your reactions to stressful situations will help with.
How To Aim For A Level Headed Response
Let’s say you find yourself in a stressful situation. You start to feel your emotions taking hold of you. But, instead of allowing this to happen, you recognise what’s going on, and you can slow the process down, remove yourself from the situation, put things into perspective and react more mindfully.
Having a neutral mindset when trading forex doesn’t only relate to negative situations; it relates to positive ones too.
If you begin trading with a lot of success in a relatively short period, it’s easy to get swept up in how this makes you feel and what this means for your lifestyle.
It is important for you to have a neutral mindset when trading forex; you should try to stay grateful.
Return to your gratitude, whether your trades have achieved a +2% month or a +20% month. Be thankful for the results, big or small, and the positivity that trading has brought to your life, whether that’s by giving you a new hobby or financial freedom.
In addition to keeping you level headed about your wins, practising gratitude in forex trading can also help you deal with your losses.
Regardless of what it is, being thankful for the situation helps you avoid those high expectations that result in disappointment should something negative happen.
One way to practise gratitude is with affirmations. Regardless of the date, time or what’s going on around you, repeat the following to help ground you in a grateful headspace… “I am grateful for my trading journey, no matter what it entails.”
Speaking of which, it’s important to remember that while learning how to manage stressful situations in trading is crucial, there’s no point in trying to avoid them.
It is also essential that you understand what you are doing. Else, you will end up starting from scratch every time. You must be sure to follow proven strategies to ensure consistency.
Don’t Sell Yourself Short
Another, perhaps surprising, way to keep your nerve when trading forex is to challenge yourself.
Trading by trait is a stressful profession but trying to avoid stressful situations by selling yourself short and always acting from within your comfort zone.
Doing so can actually be detrimental to your work ethic and motivation because you will end up seeing the same results repeatedly.
It is only by making big moves that you can see significant results, and while it can be scary at first, over time, it will build confidence and make you a stronger trader in your own right.
All in all, there are numerous ways to manage your emotions whilst trading, and we’ve explored three key ways in this article. This sort of training is something we prioritise providing within our service as we continuously strive to make you the best traders you can be.
For more information about what’s included in our services, contact us.
HAVE ANY QUESTIONS?
Do you want to learn more about Forex? Or would you like to understand how Forex experts achieve their trading goals? Speak with our team now and we will be more than happy to help.