Making and losing money in the blink of an eye while trading evokes all sorts of emotions. It’s so easy to get excited when a trade develops exactly like your plan. It’s equally easy to get frustrated and mad when a stock goes the wrong way and you know another trader is collecting on your mistake (that lucky chump!).
But when was the last time your emotions helped you in a trade? Has that positive excitement ever been costly to you, causing you to either book profits too early or stay in too long (feeling like it was easy)? Has your anger ever led you to put on grudge-trades, trying to “make back” your money quickly after a loss? It’s obvious to see that emotions are detrimental to your wealth!
I took up golf seriously when I was 13. My dad had always been a scratch player, so I had a great teacher for all aspects of the game. After I had been practicing and playing every day for several months, an important day arrived. He and I were playing golf one afternoon and on the 9th green, I had my first putt ever to break 40. It was about 2 ½ feet long and I should have been able to make it in my sleep. BUT, I was focused on my score rather than the process. I missed the putt, shot 40, and was mad the rest of the day. I wondered how long I’d have to wait for another chance at a meaningful putt like that. My Dad made some comments which helped me then and continue to help me now. He said I rushed my effort and was clearly thinking about score (results) rather than making the putt (the process). He suggested I implement a pre-shot routine, which is a mental and physical checklist to go through prior to each shot. Doing so would help me to focus on the process rather than the result. I broke 40 a few days later, excited about this new discovery.
Trading with a systematic approach can have the same positive effects on your profitability that my pre-shot routine gave me in golf. Even if you take discretionary trades, going through a routine and focusing on the process will let you execute your trading plan much better than watching your account balance fluctuate and having your emotions flutter just as often. This might mean that each evening you do some research or screen for chart patterns. It might mean you read a stock newsletter, scan the news, or set up conditional alerts as a safety net to your trading. Maybe it just means you go through the same routine each morning, adding some structure to your day and leveling out your emotions. Whatever it may mean for you, I highly suggest implementing some kind of trading routine to help combat the emotions that every one of us faces with trading. You’ll have time to do all of your celebrating later!

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100% Pure Investments

Author's Bio: 

Stocks of Nation, a leading Indian stock market advisory company for every Indian. Whether you are an investor, a trader, housewife, retired personnel or simply a student, then you are on the right place. Started in year 2009, Stocks of Nation has outperformed other advisory companies out there with our strategic consulting, immediate and sound services and of course long man-years of experience.