Trading can be lonely and very stressful, especially if one is trading from home and alone during market hours. When market conditions are optimal and in line with your methods, it can be a real "high" with win after win after win. It is quite a different story however, when you face seemingly endless setbacks. You begin to feel the strain yet you attempt to keep going. As the markets go through cycles of up and down, traders often go through emotional cycles with feelings of excitement, frustration, and boredom. This may be one of the primary reasons many traders eventually burn out. I'm sure you've all heard stories of master traders who were at the top of their game in the 1990s, but are out of the business today.
Trading is a profession in which you must cultivate a fighting spirit, in order to cope with new challenges and daily hassles. Trading the markets is stress provoking, if you don't watch out; you may collapse under the strain. By controlling stress, you can build up your psychological resources, combat stressful events, and endure lasting success.
Probably the first step in controlling stress is to maintain a balance between your work (trading) and your personal life. No matter what the percentage, you must devote a reasonable amount of time to family life. Trading should not be your whole life. Think for a minute; what good is all the money in the world without loved ones to share it with. Money just makes you more of what you already are. Make a good effort to form significant relationships with family and friends, this is very important. The relationships not only allow you to feel connected to others, but under some circumstances, they can provide much needed emotional support. Accepting help and support from those who care about you, and who also understand the pressures of trading, can help you ease stress.
Next step set goals that are in line with your experience and skills. Be very careful not to set goals that you cannot possibly achieve especially when considering your experience and skill level. Any skilled professional must go through years of school then more years of training before he/she is considered a skilled professional in their field. Trading the markets as a professional is no different it requires years of experience and learning. If you are relatively new to trading, learning goals such as reading new trading books make more sense than performance goals such as making a 20% return. Over time you will hone your skills by taking small concrete steps and that will help you cope with stress and ensure that you make steady progress toward achieving your goals.
Keep everything in perspective. Your long-term goals are to develop skills that will make you profitable over the long haul. Try to consider stressful situations, and minor setbacks, in a broader context. Avoid blowing events out of proportion. Don't make a big deal about minor setbacks. Setbacks should be expected. Focus on the long-term perspective: With time and practice, you'll become a seasoned trader. Stress can kill, especially in the markets. Winning traders try to execute trades calmly, logically, and effortlessly.
Getting yourself into this ideal mental state requires you to deal with stress. Take care of yourself physically; build up your psychological resistance to stress, dedicate time to family and friends. Find the time to engage in activities that are fun and relaxing. If you learn to cope with stress, you will sharpen your psychological edge and endure lasting success.