TAKING ON TOO MUCH RISK
Taking on too much risk, is the greatest catalyst to trading-related stress.
It doesn’t matter if you’re a newbie, or an experienced trader with a good trading record – the thought of losing a sizeable chunk of capital and going through drawdown will flare up dangerous emotions. This is common knowledge for most traders, yet there are still a lot of people biting of more risk than they can mentally deal with.
TOO MUCH SCREEN TIME
computer trading addictionI know a lot of traders, especially new traders, have a tendency to spend far too much time looking at their charts and watching their trades. Don’t stare at the charts, this leads you to be likely to react “in the moment,” based on the emotions you are feeling and not on the validity of the trade in the first place.
If you find yourself feeling stressed out over your trades, definitely remove yourself from your screen (preferably go somewhere where there is no access to the trade terminal). This includes trading apps for your phone! You need to resist the temptation and give yourself a break from trading entirely. So, if you find that your mobile app is not helping and tempting you to make poor decisions, it may be best for you to just remove it.
UNHEALTHY LIFESTYLE CHOICES
The nature of trading has one sitting in the same place all day, doing very little aside from using their brains. So, it is really important to counterbalance that with some physical activity.
Make sure that you are getting sufficient sleep and keeping a fairly consistent schedule. It’s not good for your body to constantly be swinging your sleep schedule around and to not get enough sleep in general. If you are operating on too little sleep, you’re going to make more mistakes and bad decisions.
And of course, try to eat as healthy as possible. Your body is like a machine, and it will operate best when it’s fed the best fuel, gets enough rest, and isn’t surviving just off energy drinks. If you keep these three things in mind, your trading and your body will thank you!
Forex trading stress can easily come from traders who don’t understand the nature of their own trading system. Generally they’ve picked it up off some Forex forum, where some trader has mashed a whole bunch of exotic indicators together and explains trades should be taken when indicators A,B,C cross over each other while being confirmed by indicators X,Y,Z.
These kind of systems looks really ‘flash’, but don’t really make sense when you look into them. This can be very confusing and really stresses the trader out, because ultimately they’ve got no idea of what’s going on.
The more complex your trading system is, the more complicated every decision you make has to be. I strongly believe that traders achieve better results by keeping things simple. Thats why we use price action strategies, focusing on the important points of the markets like support/resistance, mean value analysis and effective candlestick signals.
It doesn’t get much simpler than that!
OVERTRADING
guy hanging from rope into forex chartOvertrading has got to be one of the most common reasons for Forex trading failure. Traders will overexpose their account by getting caught up in the excitement of the markets and open multiple trades at once.
Overtrading usually gets out of control really quickly – “another position won’t hurt… can it”?
Some traders also might find themselves being in too many positions because they build up a fear of ‘missing out’ – It’s a poisonous way to think.
TRADING WITH MONEY THAT ISN’T YOURS
trading stressWhen traders discover Forex and are pumped with the ‘unlimited profit potential’ marketing out there, they want to start trading ASAP. Urgency and desperation kick in and they start looking for solutions to get their accounts funded up quickly.