Here you will learn about several things that can trigger emotion when trading and throw a trader off balance mentally. Finding that right cause of the problem is a key step to regaining balance and attentiveness for the future.
- Too large a position size (entry) in relation to your capital:
- A series of losses normal for the system.
- There was a change in the market and the trading system just stopped working.
- A sense of uncertainty about whether the new trading system you are working on will actually work.
- The trading system you have chosen is not suited to your temperament. That happens!
- You chose the wrong market, the wrong TF or the timing for the best entries is different, you are not in good overall shape.
- Confluence of events.
- Momentary oversensitivity. A minor problem in trading that has arisen can be felt by you as very painful and serious at a time when you are particularly sensitive to stress.
- You have a cold or illness.
- Severe stress from another source (or several) has arisen, e.g., illness in the family, an accident or death of a family member or a friend or loved one.
- Personal problems e.g. quarrels, divorce, tensions at home, especially permanent ones.
- Serious problems at work, especially permanent.
- You had an accident.
Very important: stress from various sources accumulates. At times when you have strong or permanent stress in a field other than trading be more attentive. Severe stress magnifies emotion while trading and the number of mistakes. At the same time reduces intellectual agility, so both the analysis before and the execution of the position itself, may be more difficult for you. It is still possible, but it will be more difficult, so you should be more careful in such situations.
You should have your psyche properly prepared so even when emotions while trading arise you will know how to deal with them
Offhand, you can think about what to do to reduce stress from non-trading sources.