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Your Mood Matters: Stay Positive
Are you in a bad mood? You might want to stand
aside until it improves. Your mood has a powerful impact
on your trading outcomes. That's why many seasoned
traders take the day off when they feel out of sorts.
Trading profitably is often a matter of accurately
perceiving the markets, but our moods frequently color
our perceptions. If you're tired or worn out, for
example, you may not read signals easily, or you may
fail to see a pattern form. If you are frustrated while
monitoring a trade, you may act on impulse,
instinctively thinking that if you close out the trade,
you'll feel better. If you believe that all is hopeless
and that no matter what you do, you'll never make enough
trades to get out of a rut, you'll remain stuck and
paralyzed. If, on the other hand, you believe that with
hard work and persistence, you can turn it all around,
you'll have a better chance of actually doing it. Our
emotional states play an important role in what we do.
That's why it's vital to be aware of them, and when we
are in a bad mood, it's essential that we take some sort
of action to change matters.
People differ in
terms of emotionality. Some people are easily agitated,
while others can stay calm even when their life is in
danger. The perpetual optimist, for example, always sees
the positive, even if it means living life in a
delusion. At the other extreme, pessimists put up so
many psychological roadblocks that they never set
ambitious goals. They must be content sitting on the
sidelines and dreaming of what could have been. Even
though some people are more logical and unemotional than
others, at some time or another, everyone gets up on the
wrong side of the bed. And when your mood isn't up to
par, you'll make trading errors. It's essential to
continually monitor your mood, and when you find that
you are feeling down, pick yourself up, and make
yourself feel better.
When it comes to
moods, your mind and body are closely linked. When you
are tired and worn out, you are more prone to feeling
down and out of sorts. Even a minor setback can put you
on a downward spiral in which your mood gradually
worsens, until you are in such a poor mood that all
seems hopeless. As a general rule, the more rest and
sleep you have, the better. Background stressors can
also increase your vulnerability to an ever-increasing
unpleasant mood. The best preventative steps to
combating a negative mood are to identify stressful
background events and do whatever you can to alleviate
them. Many times, these stressful events create anxiety
that builds up. If left to fester, the anxiety may
express itself at critical moments of investing, where
ideally, you want to stay as calm as possible. Exercise
is the best remedy for pent up stress. It relieves
negative energy and helps you calm down. When you are
feeling down, exercise can also work to pick you up. It
gets your nervous system moving. Soon, you find you have
more psychological energy to actively find solutions to
problems. Along with exercise, it's important to
cultivate balance between work and leisure. Make sure
you spend quality time with friends and loved ones.
Pursue pleasurable hobbies. Similarly, making sure that
you don't overwork will help ensure that you stay calm
during the trading day and don't give into your
impulses.
Don't
underestimate the powerful impact your moods can have on
your trading outcomes. Winning traders cultivate a peak
performance mindset in which they are calm, focused, and
ready for decisive action. It's difficult to trade with
a peak performance mindset when you're in a bad mood.
The more you can control your emotions, the more likely
you'll maintain a winning edge.
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