If you let fear weaken you or affect your judgment, trading pressure will have a negative impact on your trading. On the other hand, when you use it to become more alert and focus on the challenges in front of you, it can work to your advantage. The following three steps can help you deal with trading pressure:
Acknowledging your stress is the first step in overcoming it. You must openly admit that you feel threatened, anxious, or overwhelmed. After acknowledging your feelings, observe your response to stress. Does stress make you panic? Will it cause you to make impulsive foreign exchange trading decisions? Will your palm sweat? Write down your emotions, thoughts and actions and write them in your trading journal for future review.
2. Take a step back.
Have you ever made a trading decision because of panic? If so, then you may agree with me that stress usually leads to wrong trading decisions. When your thoughts are overwhelmed by too many emotions, it may be difficult for you to sort out your thoughts and focus on factors related to your transaction. If you find yourself in this situation, take a deep breath and move away from the chart temporarily. Use this time to gather your thoughts and isolate emotions that may affect your decision-making. You may also want to listen to classical music to help you meditate and think clearly. Raja Banks swears about his nap strategy because he wakes up feeling refreshed and more focused.
3. Determine the source of stress.
What makes you feel stressed? The sooner you identify the source of stress, the sooner you can resolve and/or eliminate it.
By identifying the source of stress, you can determine whether your anxiety has an appropriate foundation. Ask yourself the following questions:
- Does the change in market conditions invalidate my trading philosophy?
- Has the risk increased?
- Considering the current situation, should I feel pressured?
Sometimes, only an objective assessment of the situation is needed to clarify the thinking and put things in the right perspective.
In some cases, determining the cause of stress can also help you avoid stress in the future. For example, if you find yourself often frightened when trading news and tend to make impulsive decisions, then you can consider closing the trade before major events occur in the future.
Stress is an important part of foreign exchange trading, because the risk of loss is always just around the corner.
The important thing is that you can deal with stress in the right way; this is really the only thing you can control. After all, stress can lead to good or bad results, depending on how you respond.