How Traders Control Emotion

Updated: Dec 20, 2019

Trading with your emotions can cause you to lose allot of money.

Practice separating your feelings with your decisions

The Big Risk

Warren Buffet has this to say about emotions; “The most important quality for an investor is temperament, not intellect”. There is every bit of truth in that quote. Now, here are tips that you can use to develop emotional intelligence as a trader.

The goal is to be a tactical mindful trader, so you leave the impulse trading behind for good. Trading tactfully requires courage, discipline and impartiality but there’s no way you are going to achieve those without a strategy. A strategy is built around a trading system, risk management and psychology. These 3 are equally important, falter in one and set yourself up for failure.

Basically the platform which is used to execute trades is the trading system. You need to first familiarize yourself with the one available with your broker. There are countless ones out there but I prefer the Meta trader. Risk management refers to how much you win when you are right and how much you lose when you are wrong. Risk-Reward ratio 2:1 and above is just fine. With a 2:1 R/R ratio, if you risk $50 on a trade you stand a chance of profiting $100. The ratio can always be increased to 3:1, 4:1 and as high as suits you with time (but always stay realistic). The psychology is fundamentally the trading emotions I’ve been talking about.

By following these clues religiously, all it will take to succeed is to stay disciplined and stick to the rules; this helps in developing courage, because you really know what you’re up to.  Stay impartial with your trades in the sense that, you are neither bullish nor bearish until you see something critical on your chart.


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