Times are rough and as the Russia-Ukraine war rages on, heightened volatility are to be expected.
To help you sail through these choppy days, here are 9 rules you should follow to alleviate stress during your trading sessions.
#1 You don’t need to be trading all the time
If the market is choppy, if you are going through a period of poor emotional control and low risk tolerance, if the market is behaving in a strange manner, make no mistake: you can wait it out and come back once the coast is clear.
#2 Low conviction trades are the worse. Subjective criteria are equally as bad
If you find yourself take a trade just because you can’t seem to find a decent play, it might be time to stop and go back to the drawing board.
In what concerns subjectiveness when crafting a strategy, you will want to keep subjective trading conditions to the bare minimum. Otherwise, you will only make your life harder and trading nearly impossible.
#3 If you plan out X trades, then X trades it is
Discipline is key and your strategy should most definitely dictate the number of trades you take. If you start taking on more trades that you originally planned, it might be a major red flag.
#4 Structure your trades appropriately
Decide beforehand which indicators will you follow, which entry point are you going to take and what will give you the green light, what will your exit strategy look like, what your stop losses will be, how much should you risk, and so forth.
#5 Charts are fine but there are other things you should be looking at
Research, back testing, thoroughly analyzing your trade log… All of those are of the utmost importance. Relying on charts alone can cost you deeply.
#6 Plan for the worse
You should also remember to plan for something which most people often forget: What will you do if your trade starts going against you? What if the market flattens and you get stuck on one single trade? How will you react once you see profit, but it just can’t seem to hit your exit point?
#7 Leave room for flexibility
You will want to plan and structure everything appropriately but there are always exceptions, meaning you should know exactly what to do in any given scenario but also leave room from snap decisions if necessary.
#8 Value your own time
Sometimes “the grind” doesn’t mean standing in front of your screen and you will soon find two things:
More hours spent do not seem to have any correlation with more profit, rather it sounds more like a fast track to burnout.
The market doesn’t really care how much time you are trading for. Millions can be made in seconds, and fortunes can be lost in a couple of hours during a single trading session.
This highlights how important is to know yourself, your limits, and do not overdo it. Being motivated is great but you will be met with stress and your concentration won’t last for hours on end. Don’t fall into that trap. Learn to trade in a focused yet rested and relaxed state.
#9 Don’t believe anything you haven’t checked and tested yourself
This last point isn’t a matter of social trading , influencers, or pump and dump schemes. It’s just that sometimes you will read upon things which worked pretty well in the past and those exact same strategies might not work today.
Back-testing your strategy is perhaps the most underrated thing in trading and yet it allows to fully understand what would happen if you followed through with your plan.
Trading sessions can be rough, especially for those who are unprepared. But with a calm and collected mindset you are bound to start making less mistakes and massively improving your results.