A big part of being successful in the stock market, is controlling your emotions. Your emotions will have you making the wrong decisions 99% of the time. If you think about it, have you ever made a good decision when you were emotional? I am talking life in general, not just trading.
Key Driver: Fear
In the stock market, there is only one emotion and that is fear. Every decision you make is because of fear. When a trade is going against you, you get out because you are fearing you will lose all your money. When you chase a stock or index, you are fearing you are missing the train and it will never come back to you. Even when you are in a winning position, you set stops or take profits because you fear you will lose them.
Having 100% control over your emotions is almost an impossible task. We are human and emotions are what make us. But there are ways to have more control over your emotions. Here are some simple steps you can do now.
Wait for price to come to you and if you miss the trade, tell yourself, the markets will be open tomorrow and another trade set up will show up.
Trading Technique
Layering in positions is the easiest way to control your emotions. Instead of going all in, layer in three entries. Have a pivot or buy/short zone, take 1/3 position size. Now ask yourself, do I want the stock or index to go up or down? Remember, you only have 1/3 of a position. If it goes down, you add another 1/3 at a pivot. If it goes up, you are making money with only 1/3 of a position. I have had worse things happen to me.
