Trading is not just about numbers and charts. It’s also about managing the emotional roller coaster that comes along with it.
As someone who has experienced the highs and lows of trading first-hand, I understand the importance of emotional resilience.
In this article, I will share seven tips to help you effectively manage your emotions while trading.
Whether you’re a seasoned trader or just getting started, these strategies can help you navigate the emotional challenges that can arise on your trading journey.
1. Plan ahead and strategise
Trading requires careful planning and preparation. Rather than making spontaneous decisions driven by panic, fear or the common fear of missing out, create a clear plan of action before entering into any trade.
You need to understand the thesis behind your trade; the “why” behind a decision. You also need to understand that it’s OK to be wrong.
Accepting that you are wrong (in either direction or timing) and moving on from that is a massive step forward in successful trading that most people simply will not adjust to.
You need to have a well-defined thesis of the reasons why you are entering into a trade (technical knowledge, fundamental understanding, your friend or someone you like on social media said so). And you need to know ahead of time how you’ll know if you are right or wrong.
A basic trading plan should include entry and exit points and risk management strategies.
2. Keep a trading journal
Maintaining a trading journal is an invaluable tool for self-awareness and improvement. Document your trades, strategies, successes and failures.
By reviewing past entries and getting into “why” you entered a trade, you can identify patterns, assess your emotional state in different market conditions and learn from your experiences.
This analysis will enhance your self-awareness and help you make more informed decisions based on lessons you have learnt.
Additionally, keeping a journal can serve as a source of motivation during challenging times, reminding you of your growth and resilience.
3. Identify your triggers
Understanding your personal triggers is key to managing emotions effectively.
For me, one of the biggest triggers is Fomo – fear of missing out. I love looking into the future, so any new shiny object or idea excites me. This has been both a blessing and a curse.
Take the time to reflect on what situations or events cause you to make irrational decisions while trading or investing. Is it market volatility, unexpected news, a potential breakout or something else?
Once you identify your triggers, you can develop strategies to mitigate their impact. This could involve implementing additional risk management measures or adjusting your trading strategy.
4. Assess your risk tolerance
Knowing your risk tolerance is crucial to maintain emotional balance while trading.
If your trades consistently push you beyond your comfort zone, this is likely to generate heightened emotional reactions.
Evaluate your risk tolerance and align your trading activities accordingly. Awareness of your limits will enable you to make more informed decisions and prevent emotional impulses from dictating your actions.
5. Embrace emotional resilience
In trading, losses are inevitable. What sets successful traders apart is their ability to bounce back from setbacks and persevere.
Cultivate emotional resilience by acknowledging that losses are part of the game. Embrace a growth mindset and learn from your mistakes.
Developing emotional resilience will help you navigate the ups and downs of trading with confidence.
6. Use technology
In today’s digital age, trading platforms offer a range of tools and insights to aid your decision making.
Take advantage of these resources to enhance your trading experience.
7. Embrace continuous learning
The market is constantly evolving and traders must adapt to stay ahead.
Embrace a mindset of continuous learning and growth by analysing the notes you have made in your trading journal and make adjustments.
Ask yourself and industry experts questions, connect with fellow traders and expand your understanding.
Trading platforms offer a range of tools and insights to aid your decision making
Matthew Carstens,
director of product experience, amana
Continuous learning not only enhances your trading skills but also builds confidence and reduces anxiety and fear.
Stay updated on market trends, explore new strategies and be open to evolving your approach based on new insights.
Remember: Knowledge is power. Staying informed will help you to manage emotions more effectively.
Managing emotions in trading is a continuing journey. Embrace the process of self-reflection, plan and use technological advancements to support your trading decisions.
Remember, emotional mastery takes time and practice. With patience, perseverance and commitment to continuous learning, you can develop the emotional intelligence necessary to be successful in the dynamic world of trading.
Matthew Carstens is director of product experience at neo-broker amana
Russia's Muslim Heartlands
Dominic Rubin, Oxford
The specs: 2018 Range Rover Velar R-Dynamic HSE
Price, base / as tested: Dh263,235 / Dh420,000
Engine: 3.0-litre supercharged V6
Power 375hp @ 6,500rpm
Torque: 450Nm @ 3,500rpm
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Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
Bookshops: A Reader's History by Jorge Carrión (translated from the Spanish by Peter Bush),
Biblioasis
Company profile
Date started: December 24, 2018
Founders: Omer Gurel, chief executive and co-founder and Edebali Sener, co-founder and chief technology officer
Based: Dubai Media City
Number of employees: 42 (34 in Dubai and a tech team of eight in Ankara, Turkey)
Sector: ConsumerTech and FinTech
Cashflow: Almost $1 million a year
Funding: Series A funding of $2.5m with Series B plans for May 2020
Teachers' pay - what you need to know
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
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- average salary across curriculums and skill levels is about Dh10,000, recruiters say
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- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
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Second Test
Pakistan v Australia, Tuesday-Saturday, 10am daily at Zayed Cricket Stadium, Abu Dhabi
Entrance is free
Sonchiriya
Director: Abhishek Chaubey
Producer: RSVP Movies, Azure Entertainment
Cast: Sushant Singh Rajput, Manoj Bajpayee, Ashutosh Rana, Bhumi Pednekar, Ranvir Shorey
Rating: 3/5
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Last five meetings
2013: South Korea 0-2 Brazil
2002: South Korea 2-3 Brazil
1999: South Korea 1-0 Brazil
1997: South Korea 1-2 Brazil
1995: South Korea 0-1 Brazil
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Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
Company: Instabug
Founded: 2013
Based: Egypt, Cairo
Sector: IT
Employees: 100
Stage: Series A
Investors: Flat6Labs, Accel, Y Combinator and angel investors
Jumanji: The Next Level
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Stars: Dwayne Johnson, Kevin Hart, Karen Gillan, Jack Black, Nick Jonas
Two out of five stars
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- Place a sun reflector in your windshield when not driving
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Bundesliga fixtures
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
The specs
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Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
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MISSION: IMPOSSIBLE – FINAL RECKONING
Director: Christopher McQuarrie
Starring: Tom Cruise, Hayley Atwell, Simon Pegg
Rating: 4/5
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