By Andy Jordan on Friday, 08 September 2017
Category: Trading General

Emotional Extremes

Many beginning traders undergo emotional extremes, feeling sheer ecstasy after a win, but crushing disappointment after a loss. However, as a mature trader, you grow to realize the folly of allowing the natural ups and downs of trading to impact your emotions.

Although as a winning professional trader you may stay calm and relaxed even after a series of losses, remaining rational and composed can be a challenge. It's only natural to question your methods sometimes, and wonder about the validity of what you are doing. On the other hand, it's also natural to get caught up in the euphoria of a winning streak and become complacent or even overconfident. You can be lulled into a false sense of security in your overconfidence, and become tempted to take unnecessary risks. Proper risk management is a must, and can help you to remain evenhanded by insuring a smooth, steadily rising equity curve.

It's important to realize that your trading performance moves in cycles, that sometimes you will be profitable and sometimes you won't. Gaining awareness and acceptance of the fact that "sometimes you win, sometimes you lose" will help you to control your emotions; by trading in an optimal state of mind you increase your chances of achieving long-term financial success. 

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