Overcoming Anxiety When Trading

Overcoming anxiety when trading

• The fear of losing money can stop traders from executing trades
• Changing the color of candles to just one color can help reduce anxiety

• ✦Using multi-colored candles decreases your ability to detect patterns.

• Visual perception in psychology explains that the brain looks for patterns and similarities in colors.
• Color affects your brain, emotions, and potentially your trading ability.
• To trade effectively, it is best to be in a neutral and unbiased state of mind.
• Fast-moving red or green candles have led to bad trades in the past due to anxiety.
• If you are anxious during a trade, use candles with the same color.
• To decrease reactivity to price moves, change the candle color to anything but red, blue, or green.
• Using a single color for up and down candles can help increase calmness and reduce anxiety.

• ✦Don't wait for the perfect entry point in trading

• Waiting for the perfect entry can lead to missed opportunities
• Perfectionism can lead to irrational behavior and drain mental energy
• Trying to time the entry point accurately is a foolish endeavor
• Using range instead of exact prices can reduce anxiety

• ✦Good traders are patient and wait for setups

• Good traders are alert yet patient when setting up
• They don't chase the market, they let the market come to them
• They use limit orders instead of market orders
• They identify the best prices to buy and sell beforehand
• Taking action only when conditions are as expected helps reduce stress and avoid emotional trades

• ✦Higher time frames offer more reliable signals

• Using higher time frames reduces stress and anxiety while trading
• Transitioning to higher time frames may be difficult at first but leads to better trading execution
• Trading a handful of high-quality trades is better than trading lots of poor-quality ones
• Day trading on lower time frames requires constant monitoring
• Lower time frames offer excitement and action, but can lead to mental fatigue

• ✦Avoid frustration and burnout by trading on higher time frames.

• Trading on higher time frames reduces the time spent in front of charts and lowers the risk of burnout.
• Maintaining a cool head and emotional discipline is easier on higher time frames.
• Avoid the frustration of stop-losses getting hit too quickly by using wider stop losses and lower position sizes.

• ✦Trading anxiety comes from not knowing what you are doing.

• Lack of trading strategy, plan, and journal.
• Not being confident in your own ability to trade.
• Feeling fear when you trade.
• Importance of using a trading journal to track performance and emotions.

• ✦Understanding the process of making and learning from mistakes is crucial in trading.

• Track patterns, emotions, and feelings in your trading journal.
• Consider the benefits of losing and learn from big losing trades.
• Understanding why you're winning and why you lost is essential to repeat success.
• Changing your perspective on losses can lead to repeatable wins in the future.