3 situations that make trading more emotional.

It is nearly impossible to take away emotions in trading. And I am not sure I would actually want to take all of them away. The problem is that too much of anything is a bad thing. Here are few reasons a trader might be too emotional.

Can’t afford to lose.

Losing the money you need to buy food or live is life changing. If the outcome of a trade determines if you eat that is scary. Losses are magnified. Big losses change your life more than big wins, no matter how much money you have. When you need the money to live no matter the size of the loss they are all big.

Self worth is wrapped up in the P/L statement.

I have an ego just like most traders but I try to use it wisely. A string of losses does not make you a loser. Most of my identity was around being a football player. I knew that it was eventually going to end in 5 years or 15. I started to diversify how I saw myself, identified myself as a brother, son, uncle, thinker, leader.  After a tough string of losses I have to remind myself again that I am much more than just a trader.

Little or no perspective.

“Your best days and worst days are always ahead of you if you continue to grow as a trader”, I can still hear the voice of my mentor. If you see every loss as the end of world, eventually you will be right. Win, lose, or draw; learn, adjust, move on.  No trade holds any more weight than the another, unless you risk too much.

What are other situations where traders are susceptible to emotions?

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  • equitytrader

    I have been reading your posts for a while, found most of them useful. Above text about diversifying yourself could save many bad emotions and people’s conflicts if really used. Thanks for this and please keep writing 

  • Amitsaraf21

    very good post thx

2 Responses to 3 situations that make trading more emotional.

  1. equitytrader says:

    I have been reading your posts for a while, found most of them useful. Above text about diversifying yourself could save many bad emotions and people’s conflicts if really used. Thanks for this and please keep writing 

  2. Amitsaraf21 says:

    very good post thx

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