👉So you see a trading opportunity. It looks like a fair setup. You get confirmation to enter, but you hesitate. You're afraid of losing money, or you have some anxiety that keeps you from pulling the trigger. This is a problem that almost all traders face at some point in their trading career. I too have suffered from fear of losing money and this problem has led to other mistakes that have stopped me from executing my best trades. Today I share my process of what I did. To reduce my anxiety while trading and the actual steps I took to improve my trading execution.
❓ Do you think the color of the candle affects you while trading? Of course it does. Feel free to tell me if this sounds familiar in the comment section. You enter a long trade expecting the market to go up. You gain a few %, then the price turns against you and forms a red candle. And you start watching the movement, especially each candle pointing down. And you focus on the red color of the candle.
😱You get more and more anxious. When another red candle forms. This was a big problem for me in my early years. I closed my trades after a few minutes. When I saw more red candles below my entry point. The solution to overcome this is simple:
🧨 Change the color of the candles to one color. This way you will only track the price and its range.
Let me ask you, which of the texts on the screen is the one that is easier to read? The single colour or the multi-colour? There is a phenomenon in psychology called visual perception. Your brain is always looking for patterns in commerce. If you use multi-coloured candles, you reduce your ability to recognise patterns. Let me repeat that. Your brain is looking for patterns, and one of those patterns is similar colors. Colors affect your brain, your emotions, your feelings. Your psychology, potentially your trading ability. To trade best, you need to trade in a neutral, unbiased state of mind. I've bought in the past because of fast moving red or green candles, I've made bad trades, both on entry and exit. If you get anxious during an open trade, use candles of the same color. So try this simple tip to reduce your reaction to price movements. Change the colour to anything but not to red. Blue or green, yellow or white candles. Just stay away from red and give me a feedback in a week or so. I find myself calmer using a single color for the up and down candles. Maybe this little brainstorming session will help relieve some of the anxiety.
👉 Here's another situation. You see a long opportunity. The price is around the key level and you need to decide. You pull the trigger at, say, $50. You say to yourself, "Wait, I'll wait until... until the market drops a few cents. The market drops to $50.02, but you're still waiting. And then the market goes back up to $50.10 and... you say to yourself, I'm not getting in now. That's a worse price than five minutes ago. I'll wait until it goes down again. And of course the price never comes back. It goes up without you. And now you're frustrated because you anticipated the move, but your perfectionism... prevented you from pulling the trigger. Fear of losing money and perfectionism can lead to irrational behavior, overanalyzing, overthinking and slowly draining your mental energy.
🟢 One of the problems I personally struggled with was. That I wanted to be perfect in my trades. I was looking for the perfect opportunity. You know, when you enter and the price never goes against you, not even one %. Being a perfectionist in trading is stressful and always being on the edge doesn't help you make good trading decisions. In most cases, when you are waiting for the perfect entry, you realize you just missed a big move. Trying to time your entry precisely, at the entry point, is a foolish undertaking. Perfection can be your biggest enemy in trading and can cause you a lot of stress.
🟢 Here's how to reduce that anxiety. Use ranges instead of exact prices. As a day trader, you will not be able to track price movements every minute of the day. That's why you should use price ranges instead of exact prices. This gives you some flexibility. And of course you still need to be strict with yourself when executing your plan. Good traders are vigilant, yet patient. When a lineup they've been waiting for pops up, they grab it without hesitation. But until that time comes, they won't budge. The price fluctuations that lure other traders. They choose to reserve energy for what they are prepared for and ignore everything else. They don't chase the market, they let the market come to them. The opposite of this is forcing trades. You know the feeling when you wait for a trade, see some activity, and pull the trigger early. You force the trade. I did that almost every day.
🟢 Here's the solution. Stop using market orders and use limit orders instead. Basically let the market come to you. Once you have selected the assets you want and done your analysis, you need to determine the prices where you will buy and sell. Your goal is simply to buy and sell at the best possible prices, and use your research to identify reasonable prices in advance. Not only will this help you get a better deal, it will also help you avoid emotion-based trading. The simple solution to reducing stress and anxiety is to only act when the conditions are what you expect. Letting the market come to you is a difficult but valuable skill to learn. So forget market orders and use limit orders. This will reduce your emotional involvement and prevent you from making bad decisions.
🟢 If you want to reduce stress and anxiety while trading, you should switch to higher time frames. This will allow you the time needed to make informed decisions. I know you will find it difficult at first, but you will continue to struggle with anxiety and stress until you make the change. If you are feeling nervous and afraid of losing money, I highly recommend trying the higher time frames. Again, this transition to higher time frames is difficult and most traders are reluctant to switch. But you need to change your environment if you want better trading performance. If you trade in an environment like the 1-minute or the 5-minute chart, you risk the risk of market noise. True, higher time frames don't offer trading opportunities with as much speed, but the signals generated are more reliable and have a much higher chance of working. Better to trade a handful of good quality trades. Rather than trying with many poor quality trades. Daytrade trading is exciting, but it also requires you to monitor price movements for many hours. Most daytrade traders initially like the excitement and moving on lower time frames, but it's only a matter of time before they experience mental burnout, and once mental discipline is exhausted, greed, frustration, anger and impatience will bring bad trades and send you into a dangerous state of mind from which it is difficult to recover. So move into higher time frames. You'll only spend a fraction of the time in front of the charts, and you'll be at less risk of burnout. After a while, you'll find that it becomes much easier to work with a cool head while maintaining mental and emotional discipline.
🟢 How often do you enter trading? The setup looked great, then the price went straight away to your stop-loss before it got to your take profit level without you. Without profit, this is probably the most frustrating scenario many traders face on a daily basis. Because you fear losing money, you tend to use small stop losses. You don't want to make a mistake and try to keep your losses small, but keeping your levels too close to the entry candle is a recipe for having your account cut to pieces. A tight stop relies on you having very precise, near-perfect entries, and we've already talked about perfectionism in trading. If you repeatedly see your stops being hit regularly before the price turns in the original direction, it is very likely that you have placed your stops at levels that other traders use, especially if you trade on obvious price movement patterns. My advice is to start trading with a wider stop loss and a lower position size away from the entry. The position size you use should be small enough that neither a loss nor a gain will affect your mindset and ability to continue trading, only then will you really focus on proper execution.
🟢If you are trading the markets with your hard-earned money, but you don't know what your trading strategy is and you don't trust your market analysis skills. You probably shouldn't be trading with a live account. One of the biggest reasons why you are nervous and afraid when you trade is that you will lose your money because you don't trust your own trading skills. You may not have learned a trading strategy. You do not have a trading plan, you do not keep a trading diary. You are simply not prepared to take risks. Real money at risk in the markets. That is why you feel fear when you trade. Basically, trading anxiety comes from not knowing what you are doing. I have talked many times about the value of a trading log. The key is to use your trading log to keep track of when you are at your best and when you are at your worst when it comes to your trading and your emotions. I pay close attention in my trading diary to times when I make mental mistakes, such as not trading a good trade when I know I should. When I am afraid of losing money or avoiding a good trade, I look for triggers and patterns. Was I confused? Did I make that mistake in a particular market situation? Do I have certain feelings and emotions from previous trades? These are the intangible factors that you need to track in your trading log.
🟢 Most traders are fixated on short-term results. They make money by pressing a few buttons and don't pay attention to the process that makes it possible. They make mistakes, learn from them, and correct them over and over again. Everyone thinks about winning, but few think about the benefits of losing . In my experience, most wins are directly attributable to a big losing trade that I learned from making money in the past. As a trader it makes no sense if you don't understand why/why you can't repeat. Similarly, losing money is a valuable experience. If you understand why you lost. Paradoxically, you cannot understand why you win. Without first understanding how you could have lost in the same situation. So change the way you think about losses, because they will show you the direction of repeatable victories in the future.
If you've already lost, at least don't lose the lesson.
Take care my friend and have a good trade!
❓ Do you think the color of the candle affects you while trading? Of course it does. Feel free to tell me if this sounds familiar in the comment section. You enter a long trade expecting the market to go up. You gain a few %, then the price turns against you and forms a red candle. And you start watching the movement, especially each candle pointing down. And you focus on the red color of the candle.
😱You get more and more anxious. When another red candle forms. This was a big problem for me in my early years. I closed my trades after a few minutes. When I saw more red candles below my entry point. The solution to overcome this is simple:
🧨 Change the color of the candles to one color. This way you will only track the price and its range.
Let me ask you, which of the texts on the screen is the one that is easier to read? The single colour or the multi-colour? There is a phenomenon in psychology called visual perception. Your brain is always looking for patterns in commerce. If you use multi-coloured candles, you reduce your ability to recognise patterns. Let me repeat that. Your brain is looking for patterns, and one of those patterns is similar colors. Colors affect your brain, your emotions, your feelings. Your psychology, potentially your trading ability. To trade best, you need to trade in a neutral, unbiased state of mind. I've bought in the past because of fast moving red or green candles, I've made bad trades, both on entry and exit. If you get anxious during an open trade, use candles of the same color. So try this simple tip to reduce your reaction to price movements. Change the colour to anything but not to red. Blue or green, yellow or white candles. Just stay away from red and give me a feedback in a week or so. I find myself calmer using a single color for the up and down candles. Maybe this little brainstorming session will help relieve some of the anxiety.
👉 Here's another situation. You see a long opportunity. The price is around the key level and you need to decide. You pull the trigger at, say, $50. You say to yourself, "Wait, I'll wait until... until the market drops a few cents. The market drops to $50.02, but you're still waiting. And then the market goes back up to $50.10 and... you say to yourself, I'm not getting in now. That's a worse price than five minutes ago. I'll wait until it goes down again. And of course the price never comes back. It goes up without you. And now you're frustrated because you anticipated the move, but your perfectionism... prevented you from pulling the trigger. Fear of losing money and perfectionism can lead to irrational behavior, overanalyzing, overthinking and slowly draining your mental energy.
🟢 One of the problems I personally struggled with was. That I wanted to be perfect in my trades. I was looking for the perfect opportunity. You know, when you enter and the price never goes against you, not even one %. Being a perfectionist in trading is stressful and always being on the edge doesn't help you make good trading decisions. In most cases, when you are waiting for the perfect entry, you realize you just missed a big move. Trying to time your entry precisely, at the entry point, is a foolish undertaking. Perfection can be your biggest enemy in trading and can cause you a lot of stress.
🟢 Here's how to reduce that anxiety. Use ranges instead of exact prices. As a day trader, you will not be able to track price movements every minute of the day. That's why you should use price ranges instead of exact prices. This gives you some flexibility. And of course you still need to be strict with yourself when executing your plan. Good traders are vigilant, yet patient. When a lineup they've been waiting for pops up, they grab it without hesitation. But until that time comes, they won't budge. The price fluctuations that lure other traders. They choose to reserve energy for what they are prepared for and ignore everything else. They don't chase the market, they let the market come to them. The opposite of this is forcing trades. You know the feeling when you wait for a trade, see some activity, and pull the trigger early. You force the trade. I did that almost every day.
🟢 Here's the solution. Stop using market orders and use limit orders instead. Basically let the market come to you. Once you have selected the assets you want and done your analysis, you need to determine the prices where you will buy and sell. Your goal is simply to buy and sell at the best possible prices, and use your research to identify reasonable prices in advance. Not only will this help you get a better deal, it will also help you avoid emotion-based trading. The simple solution to reducing stress and anxiety is to only act when the conditions are what you expect. Letting the market come to you is a difficult but valuable skill to learn. So forget market orders and use limit orders. This will reduce your emotional involvement and prevent you from making bad decisions.
🟢 If you want to reduce stress and anxiety while trading, you should switch to higher time frames. This will allow you the time needed to make informed decisions. I know you will find it difficult at first, but you will continue to struggle with anxiety and stress until you make the change. If you are feeling nervous and afraid of losing money, I highly recommend trying the higher time frames. Again, this transition to higher time frames is difficult and most traders are reluctant to switch. But you need to change your environment if you want better trading performance. If you trade in an environment like the 1-minute or the 5-minute chart, you risk the risk of market noise. True, higher time frames don't offer trading opportunities with as much speed, but the signals generated are more reliable and have a much higher chance of working. Better to trade a handful of good quality trades. Rather than trying with many poor quality trades. Daytrade trading is exciting, but it also requires you to monitor price movements for many hours. Most daytrade traders initially like the excitement and moving on lower time frames, but it's only a matter of time before they experience mental burnout, and once mental discipline is exhausted, greed, frustration, anger and impatience will bring bad trades and send you into a dangerous state of mind from which it is difficult to recover. So move into higher time frames. You'll only spend a fraction of the time in front of the charts, and you'll be at less risk of burnout. After a while, you'll find that it becomes much easier to work with a cool head while maintaining mental and emotional discipline.
🟢 How often do you enter trading? The setup looked great, then the price went straight away to your stop-loss before it got to your take profit level without you. Without profit, this is probably the most frustrating scenario many traders face on a daily basis. Because you fear losing money, you tend to use small stop losses. You don't want to make a mistake and try to keep your losses small, but keeping your levels too close to the entry candle is a recipe for having your account cut to pieces. A tight stop relies on you having very precise, near-perfect entries, and we've already talked about perfectionism in trading. If you repeatedly see your stops being hit regularly before the price turns in the original direction, it is very likely that you have placed your stops at levels that other traders use, especially if you trade on obvious price movement patterns. My advice is to start trading with a wider stop loss and a lower position size away from the entry. The position size you use should be small enough that neither a loss nor a gain will affect your mindset and ability to continue trading, only then will you really focus on proper execution.
🟢If you are trading the markets with your hard-earned money, but you don't know what your trading strategy is and you don't trust your market analysis skills. You probably shouldn't be trading with a live account. One of the biggest reasons why you are nervous and afraid when you trade is that you will lose your money because you don't trust your own trading skills. You may not have learned a trading strategy. You do not have a trading plan, you do not keep a trading diary. You are simply not prepared to take risks. Real money at risk in the markets. That is why you feel fear when you trade. Basically, trading anxiety comes from not knowing what you are doing. I have talked many times about the value of a trading log. The key is to use your trading log to keep track of when you are at your best and when you are at your worst when it comes to your trading and your emotions. I pay close attention in my trading diary to times when I make mental mistakes, such as not trading a good trade when I know I should. When I am afraid of losing money or avoiding a good trade, I look for triggers and patterns. Was I confused? Did I make that mistake in a particular market situation? Do I have certain feelings and emotions from previous trades? These are the intangible factors that you need to track in your trading log.
🟢 Most traders are fixated on short-term results. They make money by pressing a few buttons and don't pay attention to the process that makes it possible. They make mistakes, learn from them, and correct them over and over again. Everyone thinks about winning, but few think about the benefits of losing . In my experience, most wins are directly attributable to a big losing trade that I learned from making money in the past. As a trader it makes no sense if you don't understand why/why you can't repeat. Similarly, losing money is a valuable experience. If you understand why you lost. Paradoxically, you cannot understand why you win. Without first understanding how you could have lost in the same situation. So change the way you think about losses, because they will show you the direction of repeatable victories in the future.
If you've already lost, at least don't lose the lesson.
Take care my friend and have a good trade!