Self Control Training
Self control is one of the most important aspects when you are an individual trader. Lots of people struggle to keep their emotions under control and prevent themselves from doing stupid trades, as there is nobody they have to report to. Trading requires discipline and needs you to act as an emotionless robot. Always evaluate your behaviour and never let your emotions take control. This can be quite hard sometime when you are losing money. I have made a list of rules that can make it easier
for you to keep control of yourself, and it is up to you to figure out if you need these rules and how you are going to use them in your trading.
 Don’t run away from yourself. Admit failure and take it as a valuable lesson. |
Rule 1: Don’t trade with money you can’t afford to lose
When you read this rule it must make perfect sense to you, but I have seen plenty of people breaking the rule when they were down and were “absolutely sure” that they knew where the market was going. Of course, there is no such thing as being absolutely sure where the market is going, and you should therefore never bet with money you can’t really afford to lose. This will only make your emotions stronger, and will eventually cause your brain to dysfunction. Your emotions will take over your trading, and there is really only one way this can end: bankruptcy.
Rule 2: Don’t see it as money
Money directly has an impact on your emotions, as we all need money to survive and would like to have as much as we can get. When trading it is important to break the direct connection with money, and you should see your account balance as points. Make it a goal for yourself to grow the amount of points on your account, do not think of it as money. Whenever you account reaches the level you set as a goal for yourself ou can cash out some of it, and start seeing it as money again.
Rule 3: Take a break when losing
This is one of the most difficult things to do. When traders are losing money they have a natural tendency to try to win this back as quickly as they can, as nobody really likes to lose. The fact is that there are days that it seems that you simply can’t make a winning trade. Admit this fact to yourself, and take a break on those moments. I always advise people to step away from their computer whenever they lost 5% of their account.
Rule 4: Admit failure
Traders can’t afford to have a big ego; one must be able to admit failure to itself. No single trader is perfect, and every trader will have to cope with losing trades from time to time. Even good trades can end up with losses sometime, as the market can be quite irrational from time to time. Admit your losses, and do not try to outsmart the market; it will only cost you more! Take it as a valuable lesson and try to learn from it.
