Examine your trading emotions closely. Our emotions are a result of our thoughts but there is a challenge with that. The challenge is that we are often unaware of the thoughts that created the emotion. That is why we must examine them very closely. Click here or in the video below to learn more.
Thoughts that prompt emotions can happen unconsciously. Then once an emotion appears, based on those thoughts, it then influences subsequent thoughts which can spiral out of control.
To get control of these thoughts, I recommend focus exercises like daily meditation. Being able to focus on and identify unproductive thoughts allows you to redirect the mind to a more productive thought pattern.
For instance, you look at the computer screen and the market is down. That may create a feeling in your body that you are interpreting as an emotion. Once the emotion is present, you are no longer interpreting information the same way because now you have an emotional filter.
If that emotional filter happens to be fear, you are going to process information differently than if you were feeling excitement. You are going to pay attention to different things and are likely to take different actions based on the emotion that the information was filtered through.
Observing your emotions and states can be very helpful. Rather than feeling the fear and processing information through the emotion of fear, we can realize we are in a fearful state and disassociate from it before we start processing information and making decisions.
The market is a fear and greed machine. The professional traders feed off the fear of the average trader. If you are in fear, and taking the actions of a trader in fear, the professionals are very happy to work with you because they can take advantage of you.
Learning to meditate is a great way to learn to become disassociated from your thoughts.
You can train yourself to handle these fearful situations. I recommend you pretend in advance you are in that situation you would like to change your reaction to. Then role play how to properly process through that situation multiple times. This will train your subconscious to act in a more controlled manner. If you closely examine your trading emotions it will be well worth it. Give it a try!