How To Deal With Difficult Emotions | A Short Guide For Traders

By Yvan


We all want profits, that’s why we trade. But sometimes the market ain’t in a giving mood, instead, it seems like it’s out to get us. And this often causes us to feel irritated, rushed, and overwhelmed. 

In this short post, I’d like to encourage you to try a simple mindfulness practice. It’s called Breaking The Spell.

Here’s what it looks like:

Notice each time you feel anxious, rushed, overwhelmed…

If you’re a day-trader, try to develop an awareness of it throughout the trading session.

If you’re a swing or position trader, try to be aware of it whenever you initiate a trade or close one, or when you’re simply looking at your current positions.

The point is, the sooner you can catch those emotions as they’re happening, the better.

Maybe try to see it as a game–try to catch these difficult emotions as they happen, as often as you can. 

If You Feel Anxious…

When you notice anxiety, make a mental note: Anxiety, I see you.

Notice that mental habit that you have to just let that anxiety englobe you and carry you off into worry and blind reaction.

Don’t eat the bait.

Instead, notice what it feels like to be anxious. Notice how compelling it is–it’s like a spell has been cast on you. But once you become aware of it, for some reason, the spell is broken. Notice that.

But breaking the spell isn’t enough. You have to build a new mental pattern: pausing and softening into the feelings in your body. Then, redirect your attention to what’s written in your trading plan and what you know you should be doing.

This way, you can halt (or at least greatly reduce) anxiety as it seeks to rebuild its momentum.

If You Feel Rushed…

Same here: make a mental note: Agitation, I see you. Notice how that mental habit seeks to control you, again, like a spell.

Soften into it and understand that the market is going to do what it does, whether you want it or not. You could reap a loss, lose a bunch of profits, could even be down on your performance for the year. It’s absolutely normal to want to make it all back. But understand that your most urgent task isn’t to make back some money lost, it is to follow your plan through thick and thin.

Personally, it took me too long to understand that. There was a time when my ego and emotions had taken so much control that I kept messing up my trades because I was desperately trying to not lose.

Until I realized this: I don’t control how the market behaves and I cannot be profitable all the time. Over enough trades, though, my profitable trades should amply make up for any short-term losses I incur.

But in the immediate term, there will be days, weeks, and sometimes even months where I will reap losses. Even when following my plan to a T.

This is how probabilities show up.

So, this was my realization, and it was a pivotal moment. Now I follow my plan with discipline, but I never let myself think “I need more return for this month”, or, “I need to get back what I lost.”

There is nothing to “get back.” In the short term, the market gives some and takes some. You do not control that. You only control how much. This is key.

So, realize that the only way you can improve your trading performance is to tell yourself that, sure, you’re not necessarily where you want to be right now, but it’s fine because you’re playing the long-term game.

Enjoy the journey. Focus on trading well in the present moment and let your results speak for themselves over time.

If You Feel Overwhelmed…

When you feel overwhelmed, make a mental note: I see you. Then, pause and notice the symptoms. If you look closely at what is happening, you’ll notice some symptoms in your body and some story in your mind. The two tend to feed off of each other.

Try to bring some mindfulness to the experience. The feeling of being overwhelmed could still be there, but it won’t englobe you the way it did previously. And within that space, you can make an important choice: to respond rather than react, and to trust that you’ll be able to handle with composure whatever the market throws at you.

If You Feel Hopeless…

When you notice hopelessness, make a mental note: Hopelessness, I see you.

Hopelessness is what happens when you are desperately trying to control something that can’t be controlled. Peace is what happens when you stop trying.

Understand that you have no power over what the market hands you. You have power over how you respond. Learn to stabilize your mind. A formal sitting meditation practice can help a lot. It will allow you to develop mental skills like patience, resilience, and overall maturity in working with difficult emotions that can be used in your “non-meditating” time.

I’ve said it a zillion times, meditation is so much more than a self-improvement technique, it is a path to peace.

Final Words…

So, this is a simple practice I recommend you do: Notice and address. That’s it.

Simple but not easy… but work on it and get good at dealing with your emotions. This is a big part of trading. Almost every situation will turn out better with a cool-headed, emotionally mature approach.

Also, don’t forget to smile and enjoy the journey.

Wishing you a profitable week,

 

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Memorable Lines From This Post

When you notice anxiety, make a mental note: Anxiety, I see you. Notice that mental habit that you have to just let that anxiety englobe you and carry you off into worry and blind reaction. Don’t eat the bait.

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I don’t control how the market behaves and I cannot be profitable all the time. Over enough trades, though, my profitable trades should amply make up for any short-term losses I incur.

Click to Tweet

I never let myself think “I need more return for this month”, or, “I need to get back what I lost.” There is nothing to “get back.” In the short term, the market gives some and takes some. You do not control that. You only control how much. This is key.

Click to Tweet

Hopelessness is what happens when you are desperately trying to control something that can’t be controlled. Peace is what happens when you stop trying.

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