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This morning, I happened to catch a video on YouTube. It was something about the coolest guy on Earth. It made me think about being cool and having your act together as a trader.

Trading can be fast-paced. As an active trader, you may sift through a barrage of information from media reports to earnings statements to unexpected national events. It's sometimes hard to make sense of it all, and to see which pieces of information actually impact the markets you are trading. What will happen next is never certain. Trading plans that you developed during off-hours may not match current market action. When things don't click and fall into place in the way that you had planned, it can be stressful, confusing, and frustrating but in all the confusion, it's important that you keep cool and organized. Rather than try to do too much with the little time and energy you have, you must stay focused.

The pressure to get things done in a short time can be a significant source of stress. And when your plans don't seem to be working out, there's psychological pressure to make difficult decisions quickly.

You wonder if you should stick with your current trading plans, or should you look for new opportunities? There's a need to be careful. You don't want to make a wrong decision and miss out on a rare market opportunity. When you feel that you have too much to do, and not enough time in which to do it, it grates on your nerves. Suddenly, everything can seem disorganized, unstructured, and confusing.

One of the most effective ways to cope with the pressure to get more things done than you have time for, is to change your perception of time.

Time perception is the degree to which people perceive their use of time as structured and as contributing to a specific goal or set of goals. When you're frustrated and unsure of what to do next, you can feel that you are moving aimlessly back and forth among alternatives and getting nowhere. It's as if you are out of control.

At these times, it is necessary to return structure into your trading life. When you perceive that your time is structured and that you are working towards a specific purpose, it will help you to feel more calm and focused.

When frustrated by the markets, you can become an extreme perfectionist, afraid to make a mistake and unsure which path to take. To gain control, it is necessary to set clearly defined and realistic goals, and make specific plans for how to reach these goals. When you feel especially confused, it makes sense to pick a few trading plans, and focus on implementing them. Which should you pick? Pick the ones that seem to match the current market conditions, but don't get hung up on it.

Many traders make the mistake of thinking that they must choose the one right plan, or else they will miss out on the trade that "goes to the moon."

That may be the case. You may have chosen a trading plan that wasn't the best, but you could be wasting more time deliberating among plans and setups than in taking decision action. Taking decisive action can restore a feeling of control and direction.

Once you implement at least one of your plans, you will naturally reward yourself, and feel that you have achieved a meaningful goal. You'll feel back in control, and once again enjoy the process of trading. Everything will start to feel as if it is coming together into a whole.

When you perceive your time as structured, you will feel less stress and feel more satisfied with your overall trading experience. You'll feel cool and organized, and trade more profitably.

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Tuesday, 23 July 2024

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.