How to handle stress in forex trading: part 2

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In “How To Handle Stress In Trading: Part 1” I have discussed the stress of losing trades, how to handle it and what to expect beforehand. Also some very useful stress-prevention techniques that i personally use. If you haven’t read the first part, please go ahead and start from there. There isn’t an exact formula to follow in order to prevent stress in forex trading, but i will give you some great tips that will help you reduce it.

 

Winston Churhchil  stress in forex trading
Even though Mr Churchil was not a trader, I think every trader should live by his words. The better your plan is, the less stress you will experience in your trading career. It is a one way street.
First subject i want to discuss today is:

#3 Adrenaline Rush

Many researches have found out a link between trading and adrenaline. But let’s be honest, you, me and everybody else, we don’t need researchers, professors and scientists to tell us the obvious. We have all experienced it. Setup is cooking, it all lines up, you start to feel the adrenaline. Sweaty palms. It is happening. You are risking money, it is dangerous, you know it and you love it.
Regardless how advanced technologically we are, the adrenaline from risks is wired in us from primitive times. The problem with adrenaline and trading, is that some people subconsciously trade for thrill. They trade in order to feel that kick. This is wrong. We trade in order to make money and we should try to avoid and suppress the adrenaline. We should not be led into a trade because of the excitement.
The more we cherish and pursue the euphoria the more stressed out we will get. Trading is not Six Flags or the Bellagio. You are not trading for fun. However trading could be fun!
If you are an “adrenaline junky” figure out another way to get your “high”. Trading could turn out to be very very expensive habit for this specific purpose. The simplest way to do it, is to open a demo account or a very very small live account where you put the high risk trades. This way, worst case scenario would be, you lose some cents, while making the real money on your bigger live account. The bigger live account where you take only the best of the best. It is a win-win situation. Best of course is to get yourself a demo account and do whatever you want to and lose nothing.

#4 The early signs of stress in forex trading

As explained in part 1 of this article, stress is bad for your emotional, psychical and mental conditions. You can’t expect nothing good from stress. It is same as cigarettes. They stink, you have to pay for them, and they KILL you! Why on Earth would someone want to smoke? I really don’t get it.

However it is important to pay attention to your body and what it is saying to you. Here are a few tips that can help you “listen and understand” what your body is telling you:

  1. Having troubles sleeping at night?
  2. Feeling tired all the time?
  3. You are not laughing anymore? Everything is grey, you go out with friends and you have become the silent one in the corner of the table?
  4. Have you lost your appetite lately? Or maybe you are stuffing yourself with anything you can get your hands on?
  5. Constant headaches?

These are just a few of the symptoms that you can start experiencing if you are under a lot of stress. Of course don’t get nuts now if you have lost a few kilos lately. I’m NOT a doctor. But really start paying attention to your health as this is important for you to be able to be in top notch shape for trading.

#5 Traders of the 24/5 Forex Market

Anybody who is educating you would tell you how great the Forex market is, due to it’s operating hours. And it is true! I will tell you the same thing – you can trade it anywhere in the world because it is open 24/5. So there is always an active session you can take advantage of. However very few people are considering the drawbacks of it. Many traders would almost not sleep in order not to miss a single pip move on the market.

It doesn’t matter if we have pending orders available at our disposal. It doesn’t matter that we can ALWAYS catch the next move. This constant pressure of catching every single move in a 24/5 market could be a killer.

How deal with it?

It is actually pretty simple. I have already answered the question above. There is plenty of trading setups enough for all of us. No need to be everywhere at all times. It is simply impossible. If you live in Europe, trade the European session and maybe part of the US session. It is more than enough.

#5 Retails Traders – Home vs Office

If you are a full-time trader you are probably working from home. Now that has some great advantages but it could also lead to work stress being important to your home and family. This is a mistake no one should ever allow him or herself to do. Nothing is worse than going home to your family and loved ones, all moody and jumpy and taking it out on them.

It is not fair, it is not healthy and it is an absolutely selfish move of you, if you do it!

If you decide to work from your home for one reason or another, the “home-office” should have clear boundaries. Physical and time limits should be well defined.  Have yourself a workstation setup preferably in a separate room. A room as little distractions as possible. Give your work 100% of yourself.

However when you leave the office at certain hour of the day, you must leave all emotions and the stress in there. Inside the office. This is why boundaries should be defined. It is a very slippery slope. Over-trading, neglecting your family…these are traps that many home-office workers fall into.

Believe me I have been there. Once you dedicate a special place for work, you will see how the brain is relaxing during the after hours. Your mind knows that once you leave that room or space, you are no longer working, thinking about work or anything else related to work. Another day will come, another battle will be fought. Now it is time to relax, spend time with the kids, the wife, spots, movies, books…

The Stress Test

I have found this Stress Test online. Go ahead and test yourself. The lower the results you will get (the number at the end) the less stressed out your are. If it turns out you are stressed out, don’t freak out. It is not the end of the world but it is good to think about how to reduce this stress. Even more important is, what causes you to be stressed out?

Here are 7 ways to keep the stress low (thank you Harvard)

stress in forex trading

That would be all for the second part of this article. I hope I have managed to help you in one way or another! Share your comments below! And of course if you liked the article share and like it.

 

Yours,

Vladimir

 

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