This post covers some of the most common discomforts that comes with trading and suggests a couple of possible solutions on how to deal with them. If this sounds interesting to you, please read on.
Discomforts Traders Face:
Discomforts associated with trading can take on many shapes and combinations. Below are some of the most prevalent ones:
- The fear of losing.
- Taking a loss / being wrong.
- Sitting / being in a losing trade.
- Holding a trade until it reaches its target.
- Going into a drawdown.
- Making mistakes.
- Being patient, i.e. having to sit and wait for a trade to present itself.
- Comparing ourselves to others.
- Missing a great trading opportunity and FOMO.
- Changing market conditions.
- Information overload from the online world, influencing our judgements and our decision making ability.
These are just the main ones. Feel free to add any others that cause you discomfort. But now, the real question: How do we get better at feeling uncomfortable?
How to Master Feeling Uncomfortable:
For me, the above can be split in 2:
- Unavoidable Discomforts – these are the inherent to the market which you can’t eliminate, such as taking losses or dealing with changing market conditions.
- Avoidable (or minimizable) Discomforts – these challenges are rooted in the human factor and can be significantly reduced or eliminated, like making avoidable mistakes, comparing ourselves to others or being influenced by the media.
Below I offer ways to get better at dealing with these discomforts:
Unavoidable Discomforts:
These stem from the fact that markets are uncertain and can’t be predicted. The best way to navigate uncertainty is not to eliminate it, but to accept it and plan for it. This means having a trading strategy with an edge and always writing out a detailed trading plan for every trade (entry, price target, stop loss, risk and how to manage the trade till target) before trade execution. Having and following a trading plan is the only way to reduce market uncertainty, the rest you have to make peace with as it is out of your hands.
Avoidable (or minimizable) Discomforts:
Since these are of a human nature, we can most definitely work on them. Let’s take the example of making a mistake, measures can be put in place to ensure it is not repeated. Or, a trader heavily influenced by news, can actively identify and eliminate external influences that cloud judgment (like social media consumption).
Others:
Cultivating self-awareness is vital for success for any trader, as it is impossible to fix what one is not aware of. Also, constant journaling and trade review can help any trader to reduce discomfort, as it boosts confidence and eliminate self-doubt through constant feedback. Lastly, practicing discipline and patience continuously is needed to make a success of any worthwhile endeavor.
Finally:
Experiencing discomfort when trading is inevitable, but it’s up to you on how you are going to handle it. Are you proactively going to plan for it (reducing it) or are you going to trade on the fly (increasing it)?
Thanks so much for reading. I hope you found this post useful. Good luck with your trading.
Thanks and Regards,
Trading SOS SOS
