How do day traders deal with negative emotions (frustration, self-doubt, etc.)?

When you make the leap into day trading, it’s all too common for negative emotions such as frustration and self-doubt to hit you, not to mention the biggest enemies of day trading, fear and greed. So, how can day traders deal with negative emotions so that they don’t negatively impact trades? The key is to treat your day trading like a business. You need to have a plan and to follow it. It should contain specific goals and include daily activities that will keep you from focusing on those negative emotions when they occur. The trader who does this is far less likely to make decisions based on emotion and is far more likely to become successful.

Five Tips for Controlling Negative Emotions

  1. Increase your trading knowledge. There’s always something new to learn about trading, and you should schedule time each week to study a course on a new trading strategy, read a book about technical indicators or find videos that explain how to trade credit spreads.
  2. Dig in and do research. There’s almost always something happening in markets that needs an explanation. If there aren’t any good trades take time and dig deep to learn why markets are behaving how they do.
  3. Paper trade! The only way to test new indicators, strategies and ideas is to paper trade them. Even if you’re already a successful trader, you can always learn more from paper trading. And the act of trading will bury those negative emotions.
  4. Write or rewrite your trading plan. If you don’t have one now is a great time to write a trading plan. And if you have one you should revisit and revise it each month based on any new knowledge or experience.
  5. Analyze some completely new charts. Maybe you focus on tech stocks. That’s fine, but diversification is good. Pick another sector like energy, pull up some charts and analyze them carefully, noting reasons to go long or short. This analytical thinking helps calm and remove emotions from your trading.