3 common sources of day trading anxiety and solutions. As with most high-performance endeavors, trading can bring a lot of pressure and stress.
sources of day trading anxiety And Solutions
Here are some of the common sources of day trading anxiety and how you can address them.
1. Unrealistic expectations
Most newbie traders fall prey to this idea of a hotshot trader living a baller lifestyle in a penthouse, driving a sports car, and makin’ it rain Benjamins on a yacht.
This ain’t an episode of Billions yo!
The reality is that, unless you’re running an illegal bucket shop like the Wolf of Wall Street, it takes years or even decades of putting in the work and slugging it out in the markets before you make it big as a trader.
That is, if you do make it.
Not to sound discouraging, but there is truth in the statistic that 90% of traders are bound to fail and that only 10% wind up successful.
Of course the concept of “success” is relative, and a realistic trader might often be content enough to aim for positive expectancy or consistent returns in the long-run.
The bottom line is that having unrealistic expectations, such as reaching Crazy Rich Asians level in less than a year of trading, can set you up for huge disappointment.
Instead, piece together reasonable trading goals and a more realistic outlook based on the amount of time, effort, training, and capital needed to stay profitable.
Avoid comparing yourself to other traders and turn your focus into creating your trading “business plan” that takes your own resources and constraints into account.
2. Lack of self-control
Oftentimes traders are able to do the research, back testing, and demo trading enough to create a solid strategy. It’s sticking to the plan that becomes the problem.
And who could blame them? It can be very tempting to forget the rules when the market makes big moves that are just too good to pass up.
However, this kind of thinking can be a gateway to impulsiveness and overtrading. Constantly giving in to FOMO can result in a cycle of taking unplanned trades, multiple drawdowns, and desperation.
To overcome this, some trading psychologists suggest just sticking to one good trade per day. This would force you to review all the potential setups and filter out the best possible shot, encouraging you to exercise more self-control.
3. Lack of self-trust
On the opposite side of the spectrum, the lack of self-trust can also be one of the sources of day trading anxiety for a lot of traders.
If you find yourself following the advice of several trading gurus and attempting to copy all the setups of everyone in a trading chat group, then you might want to take a step back and figure out if you’re still doing your own thinking.
Successful traders are those who can trust their ability to read the markets and execute trades.
How will you know which trades to take when those trading signals you rely on are no longer around?
There’s nothing wrong with working with a trading coach or mentor who can show you the ropes and guide you when it comes to proper trade management, but over time you should be able to develop the skills and understanding of the markets.
At the end of the day, traders experience stress and pressure day in and out, but it’s important to stay self-aware enough to identify the causes and determine what kind of action is needed to address sources of day trading anxiety.
Psychologist Créde Sheehy-Kelly cautions that it’s crucial to identify whether the sources of day trading anxiety from heightened emotions in trading or a more general underlying mental health issue triggered by pressure, which might require the help of a professional.
That said, don’t forget to check in on your mental well-being and take a breather every now and then!
3 Common Sources Of Day Trading Anxiety & Solutions.