After so many years of teaching students about the stock market, I’ve noticed one trait that ruins traders — stress.
And after the crazy events of last weekend, we might all be feeling a little stressed.
Stress can affect both your mental and physical well-being. And heightened levels of stress can even lower your overall quality of life…
It can affect your sleep, appetite, relationships, and overall mood.
Let’s be honest, the stock market is not a naturally low-stress environment.
This leads some traders to think they’re supposed to be stressed while trading, but this is a fallacy.
You must learn how to deal with a manageable level of stress, while continually looking for ways to reduce this negative emotion.
The first step is to join us in the Daily Income Trader community…
Surrounding yourself with other active traders — seeing what works and what doesn’t — can help take a lot of stress out of your trading.
But for now, let me show you five simple methods to combat trader stress…
Never Risk More Than You’re Willing to Lose
Before you make any deposit into your trading account, ask yourself … how would you feel if you lost 100% of that money?
Of course, the plan is to grow the money. And if you study hard and apply yourself, that’ll probably happen for you.
But you can’t ignore the possibility that your first few trades will go south and take your hard-earned money with them.
And if this happens, you want to make sure you’re risking expendable income.
If losing your initial small-account capital would put a serious strain on your lifestyle, then you’re trading with too much size.
This is obviously important because you need to be able to cover your basic expenses, but there’s another reason to consider this as well…
If the money you’re trading is absolutely essential for you to live, you won’t make the best decisions when trading it.
You’ll be too emotionally attached to that money, which could lead to terrible trading decisions “in the moment.”
On the other hand, if you can find the perfect account size — one that gives you slack to make decent money but doesn’t make your stomach churn every time a dip occurs — you could potentially become an unstoppable trader.
Don’t Rely on Trading for Income
Students often ask me, “Should I quit my day job? Should I go into full-time trading?”
My answer is usually no. Because most people aren’t ready yet.
It’s always good to have a dependable job if you can, especially for newbie traders.
Having a reliable stream of income (that’s unrelated to your trading performance) can actually help you be a better trader.
If trading is your only source of income, that puts a lot of pressure on your decision-making.
Unless you’ve got ample money saved, you’ll have to succeed in the markets at all times to put food on the table.
There’s too much pressure and stress if you need that money to live. That’s not a winning recipe.
Constant success in the markets is impossible and unrealistic. Don’t expect to win on every trade.
That said, if you know you’ve got money coming in from another job, you shouldn’t have to worry about losing your shirt in the stock market…
This takes the pressure off of your trading performance, allowing you to focus on your long-term process as opposed to your near-term profits…
Minimize Your Overnight Exposure
A lot of trader stress comes down to holding positions too long.
If you hold positions overnight, you’re likely to experience more stress, especially outside of active trading hours.
This is one of the main reasons I love day trading.
While day trading has its own challenges, I think holding swing positions is even more stressful.
After all, anything could happen overnight. Just look at the tragic events of this past weekend for evidence of this.
I’d usually rather close my positions out before the close and not have to worry about what headline events occur overnight (or over the weekend).
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In the stock market, the overall price action can shift on a dime.
Why carry the burden of wondering what’s gonna happen in the premarket, after hours, or over the weekend … when you could close your positions out and sleep like a baby?
However, sometimes you must hold positions for longer than a day to realize your maximum returns…
The key is being able to determine what setups are swing trades and what setups are day trades.
Are You Ready To Take The Next Step?
I’ll let you in on a little secret … I wouldn’t be the trader I am today if I hadn’t discovered Tim Sykes’ Trading Challenge so many years ago.
I want you armed with all of the tools necessary for success in the stock market.
So, if you’re passionate and dedicated, ready to take on anything the market throws at you, then I’ve got something for you…
Tim Sykes has helped traders learn to succeed for years. More than 30 of them are now millionaires.
Are you ready to take your trading game to the next level? Do you have what it takes?
It’s time to find out…
CLICK HERE TO SIGN UP TODAY FOR ONE OF OUR FREE, LIVE TRAINING CLASSES!
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S. STOP STRESSING over which stocks to trade and START getting daily, FREE trade alerts from our algorithm — Sign up for Oracle Alerts by clicking here.