5 Ways You Can Reduce Your Trading Anxiety

5 Ways You Can Reduce Your Trading Anxiety
By Dr. Pipslow
December 20, 2019 8:09 PM WAT in PSYCHOLOGY
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Have you ever been unnecessarily over-conscious about your trading that it affected your
forex performance negatively? Then you, my friend, have just experienced a classic case of
stage fright or performance anxiety.
Performance anxiety usually occurs when you scrutinize every single detail of your trading
decisions too much, to the point that each action becomes subject to criticism.
This behavior (which is also experienced by athletes, artists, and students) usually has a
crippling effect on overall performance as the pressure to achieve a certain goal can cloud
one’s judgment.
As forex traders, we are constantly subject to the pressure of making profits that we
sometimes lose sight of the importance of sticking to the trading plan or practicing
proper risk management.
Here are some tips that can help you overcome performance anxiety in trading:
1. Forget that perfect trade.

My favorite trading psychologist, Dr. Brett Steenbarger, noted that the most common
source of performance anxiety is perfectionism.
Traders who are preoccupied with catching the best possible entry and exit points,
maximizing their profits through position sizing, and never losing a trade end up being
disappointed with themselves when they fail to meet these goals.
Instead of looking for that perfect forex trade, remind yourself that there’s nothing wrong
with just going for the profitable trade and that the market won’t always go your way.
A controlled loss or ending up with fewer pips than you ideally could’ve is not the end of
your trading career.
2. Focus on the process, not the profits.

Forgetting that perfect trade may be difficult for some as this could be misinterpreted as
lack of ambition. If this holds true for you, then it might be better to set goals based on the
process and not on your profits.
For instance, you can give yourself points for sticking to your trade plan, for cutting your
losses, or for pressing your advantage.
At the end of each trading day, you can ask yourself the following questions: Did I execute
my trades the way my system said I should? Did I make the proper adjustments? Did I
manage my risk properly?
If you answered yes to all three questions, then you deserve two thumbs up! If you wanna
be perfect, focus on executing good trade/risk practices and processes perfectly.
3. Take baby steps when increasing your risk.

Sudden increases in position sizes can also cause unnecessary trading anxiety. This
usually happens when traders gain confidence in their trading and decide to put more
money on the line without making trading psychology adjustments.
Put yourself in the size 14 shoes of an NBA player about to take a free throw during the last
seconds of a tied game. You’re about to take a shot that you’ve made probably a thousand
times before, yet the pressure to not miss the basket is also a thousand times greater than
usual. Even seasoned players still choke during these moments, and it’s not surprising that
traders can also commit more mistakes when they’re more conscious about how much is at
risk.
Avoid the stress by increasing your risk at a more gradual pace instead of doubling or
tripling it right away.
It could also help to remind yourself that the only thing that’s changed is the amount you’re
risking yet you’re still taking your usual setups and still following your same old trade plan.
4. Step away from the screen.

Performance anxiety manifests itself in overtrading as well. It shouldn’t come off as a
surprise, as the internal pressure of making money sometimes blinds our rational thinking.
Instead of sticking to our trading plans, we just let our emotions get the best of us.
Overwhelmed with the need to make up for our forex losses, we may end up taking one
trade after another and before we know it, we’ve already lost so much money!
The most obvious solution to this problem is to step away from the screen once you’ve hit
your maximum trading loss.
Remember that there will always be a tomorrow for those who choose to preserve their
capital today. For those who don’t and blow their trading accounts, well, there’s always
Hollywood.
5. Get a life.
When your world revolves around trading and the market is just not going your way, you’ll
probably feel that your world is collapsing. This makes those who trade for a living and who
have little else going on for them especially vulnerable to performance anxiety.
So don’t put all your eggs in one basket. If you do, chances are, you will only subject
yourself to unnecessary stress. Find yourself a nice laid-back hobby or engage in
adrenalin-pumping sports. Do something that you will enjoy and provide you with an outlet
of distraction for those times when the markets go against you.
At the end of the day, don’t beat yourself up for feeling like a choker and allow yourself to
be overcome by performance anxiety. If you feel it coming on, just step away from the
screens, relax and remember that perfect forex trading performance and setups don’t exist.
Backtrack to the realistic expectations you have set for yourself ahead of time, and you’ll be
surprised at how keeping your goals in check can turn your trading around!
About Dr. Pipslow

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5 Ways You Can Reduce Your Trading Anxiety

1. Forget that perfect trade.

2. Focus on the process, not the profits.

3. Take baby steps when increasing your risk.

4. Step away from the screen.

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