Trading psychology

I've recently been having some conversations about the psychology of sitting in a trade. It seems one of the big struggles is looking at trades over a longer period than a few minutes, hours or days, or indeed sitting in them.

When I trade for the long-term I still have to battle all the emotional and psychological battles that we all face day by day. Take my EURSD long, already over 100 pips offside. I can obviously think that I've gone to early, or I've got it wrong but I counter that by focusing my mind on what my strategy is. At worst, I know my loss amount and I'm prepared for it. In theory I can kick back and ignore the day to day noise, unless it's something that could materially affect my strategy.

Coping with time is the big problem. You can't set a clock on trading. One trade might take you 5 minutes to hit target, one might take 5 hours. There's no time limit for a price to trade between technical levels. Everytime we trade we have to sit back and wait for something to happen. Some people can cope with doing that on short-term trades and not longer-term trades, while some can't cope with the short-term but can cope better with the longer-term. Both sides feel the same frustration and anxiety when a trade is out of our hands and we have to wait for either our profit or our loss. Although we may be in control of our trade from a profit or loss perspective, we're not in control of what happens while we're waiting, and that's where we all struggle.

Help is at hand though. There are ways to condition you mind to cope. Here's an example.

A chart

Here's a chart with no timeframe, no prices, no dates. It could be a weekly of 5 minute chart. It could be a snapshot of 1 minute in time or 5 years. If you can read charts you could probably find at least 3 places to enter and exit a trade. If you can just concentrate on where you'd get in and where you'd get out, and forget about how long that might take, you can start to deal with the psychology of sitting in a trade. Bring it down to its simplest form.

Simple

If you can get your head around the fact that you cannot do anything after you trade (and I don't mean tinkering with it or reacting to circumstances), then it shouldn't matter whether you're trading a tick chart or a multi-year chart. The end game is still the same, to hit your level or not. Nothing in between that wait time should derail you from that plan.

There is no way to ever completely wipe away the emotion and psychology from trading so don't try, it's as natural as the sun coming up each day. What we can do though is condition the little voices in our heads to be as quiet as possible and not to have an overbearing effect. Do that and it shouldn't matter what the trade is, the process is always the same.