Trading During Coronavirus: What’s the Right Mindset?

Whether stock prices are spiking or crashing, the stock market itself remains neutral. Humans, not so much.

Traders are subject to a powerful cocktail of emotions like greed, fear of missing out (FOMO), and a hold and hope mentality that can affect their judgment, make them break rules, and make bad decisions in trades.

What happens when you add a global pandemic to the mix? Let’s just say that crazy market volatility and crazy emotions don’t mix well.

The recent market volatility due to the coronavirus has created many trading opportunities—but it’s also made it even more challenging to keep one’s emotions in check.

In this post, SteadyTrade Podcast host and The Wall Street Coach founder Kim Ann Curtin shares some important observations and tips for staying mentally strong during the coronavirus. Plus, she shares actionable tips you can apply today to attend to your needs!

Understanding Your Mindset Is Key

The dictionary defines mindset as “the established set of attitudes held by someone. “

If you aren’t aware of your own mindset, then you’re at a disadvantage. Trading is like a game of you vs. you. It has as much to do with keeping your emotions in check as it does with having a great watchlist.

So many trading losses are due to traders breaking their own rules and not sticking to their stops or the trading plan. Usually, these decisions are fueled by emotions and needs that they haven’t yet learned how to harness.

It will never be possible to totally control your emotions or have all your needs met. But once you begin to understand them, you can learn to work with them.

About Kim Ann Curtin 

Kim knows a thing or two about this, as she has been a student of how to harness emotions for many years and has coached others on how to harness theirs with her firm, The Wall Street Coach. 

She works as an executive coach and management consultant, combining Wall Street business acumen with spiritual intelligence to help clients transform their lives and their trading. 

Kim’s been coaching for over a decade, with clients ranging from high-ranking executives and traders from Anchorage Capital, AP, Bank of America, Barron’s, BC Partners, Blackstone, Colgate-Palmolive, Credit Suisse, Crump, Ernst & Young, EisnerAmper, FINRA, Fortress, Genentech, GIC, King Street Capital, L’Oreal, Merck, Morgan Stanley, NBC, and Procter & Gamble … to name a few!

She’s also studied what makes successful traders tick and penned a well-received book “Transforming Wall Street: A Conscious Path for a New Future.”

Today, Kim lives and works on the Big Island of Hawai’i. Her unique life experiences have allowed her to develop an approach that incorporates mindfulness and real-life business street smarts.

Learn more of her story in Ep. 100 of the SteadyTrade podcast!

Interview with Kim Ann Curtin 

In this interview, Kim shares her thoughts, tips, and expert advice for helping traders navigate the uncertain times and market conditions we’re living with during the coronavirus pandemic.

How can traders handle the stress of the current world situation? 

First, I believe it’s important to recognize that what’s happening is a shock to your system. And it’s not too dramatic to call what is happening right now a trauma. This pandemic and all that has happened because of it in our day-to-day lives is a trauma — and, as with any trauma, there’s a sense of disbelief. Not only is this happening to me, but to everyone else. All of this is important to acknowledge because it facilitates you being more willing to be patient and empathetic with yourself during it, and perhaps a willingness to have more patience than usual with others. 

Second, I recommend allowing yourself to make time and space to *feel* all of the uncomfortable feelings that might be coming up for you and to sit privately and feel them. Don’t ignore them and push them down. If you do this, you give them room to disperse a bit. Just like a boiling pot of water has a small hole to let the steam out, you, too, need a little vent. If you create a safe space (when you’re not trading) to let yourself feel any uncomfortable feelings, doing so brings them up and out of the unconscious. When you allow yourself to do this, you have a better chance of them not controlling you later. 

Anger, grief, disappointment, worry — these are just a few of the emotions you might be feeling. Being willing and able to recognize them and giving them some time and space to be felt allows them to process up and out. Consider journaling or talking to a friend that won’t silver-line things.

What are some challenges that the traders you work with are dealing with right now? 

All the same challenges as usual, but with the volume turned WAY up.

Feelings of missing out, the desire to try to make money back, the hold and hope mentality—all of these things are heightened. The usual challenges of trading feel more profound and serious.

Many traders are also having trouble focusing. That’s totally normal! Remember: What has happened is SO not normal. We are living through a major unpredictable experience. 

Some traders, the new ones especially, have even hit pause on trading for the moment.

No matter how many opportunities are out there, you still have to give yourself permission NOT to trade. Good for those who are self-aware enough to know that they might not be ready for this!

Right now, I’m reading a book that I think could help folks navigate the current situation: “Do Nothing: How to Break Away from Overworking, Overdoing, and Underliving.”

If I could, I’d add to that title, How to Break Away from Overtrading. This book shows us that we have culturally been conditioned to feel guilty when we’re not being “productive.” We’ve been conditioned to think we need to be doing something to have a sense of worthiness.

So consider this if you’re a new and beginner trader: Do you really want to trade, or do you just think you should?

Give yourself room to be where you are right now. It’s better not to trade than to overtrade. I’m learning how to day trade, and all of my teachers — Tim Bohen, Tim Sykes, and [SteadyTrade co-host] Stephen Johnson — say this.

Is now a good time to get started in the stock market? 

If you thought it was hard to be a day trader before, now it’s even harder.

Traders like Tim Bohen, Tim Sykes, and many of their students are excited about the current market volatility. It can be really tempting to think this is the best time to get in on it.

Nobody wants to be left behind during this exciting period — what an amazing market! What an incredible opportunity!

Even new traders are posting their wins on social media: “Look how much money I made!”

It’s enough to make anyone think: Hey, maybe I could do that. But you need to approach the market with caution.

It’s kind of like surfing. I’m not an expert surfer, but I’ve done it enough to know the ocean can turn on you quickly … so can the market. 

If you’re a new surfer and you haven’t been practicing for that long, you wouldn’t be going straight to Oahu to surf the Banzai Pipeline — one of the world’s deadliest waves.

Approaching a crazy volatile market without a foundation of knowledge is like that.

Remember, traders like Sykes and Bohen have been doing it for a lot longer than you. And even they have losses!

If you’re new to the market, be extremely cautious — and take it slow.

Education is so important. You definitely don’t want a teacher who tells you this is easy, or that you can get rich quick.

If anyone tells you trading is easy, you’re not around the right people. If you’re trying to learn to trade from someone who’s only doing it because he can’t watch sports during the pandemic, run away!

Ask yourself: Am I experienced enough? Am I ready for this market volatility?

You might want to be part of the action because it looks exciting — but be smart. If your financial wellbeing is under threat or your job role has changed, you need to be pragmatic as you navigate these events and the choices that come with them. Taking care of yourself is the smartest thing you can do.

What do you suggest for traders who may be feeling overwhelmed?

Begin by recognizing that you’ve been preparing for this moment for years. That all your hard work and studying is now going to come full circle. You might still be nervous, but if you have really spent the time and done the work to prepare for this, then you’re ready to go! Find the courage from deep within — and it’s OK to have the butterflies in your stomach.  

A note of caution: Be a very good steward of your needs right now. You currently aren’t getting most of them met due to this pandemic, so double check that you’re not looking to your trading or to this market to meet them. 

It’s easy when needs are not being met personally that we take our hunger for them into our trading. For example, you most likely aren’t having your need for freedom met, so you might seek it in the choice to trade as a substitute for not being able to leave your house.   

When needs aren’t met consistently over a period of time, they create feelings that are hard to be with: anger, fear, depression, confusion, apathy, etc. If you have these challenging feelings for extended periods, you can’t help but want to numb them. Since numbing isn’t a great idea, what can you do instead? At a minimum, acknowledge that they aren’t being met right now, give yourself some empathy, and this can help you to not inadvertently go seek them as you trade. 

Here’s a list of universal needs — go through it and identify which ones aren’t being met for you during this unusual time. For example, in addition to not having your need for freedom, other needs that aren’t being met might include self-expression, security, clarity, choice, spontaneity, movement, stimulation, participation, efficacy, contribution, and challenge. Be mindful of these or others so that you don’t seek them out as you trade. 

Figuring out what needs aren’t being met can help you understand yourself and your mindset, and while you may not be able to get them all met right now, at least you reduce the risk of unknowingly seeking them in your trading.  

Mindfulness matters, too. As much as you can, try to be in the moment. Consider checking in a few times a day to notice what is going on for you? Ask yourself how you feel? 

Denying or not looking at the more challenging emotions such as fear, concern or worry won’t help. Remember, feelings don’t stay the same. When we feel them or acknowledge them, they’ll actually move through us and out of us. They don’t last forever. Taking the time to feel the sticky emotions powers you through them to the other side.  

It’s hard for human beings and traders who are trained to think ahead to not think ahead. What if the economy doesn’t shift? What will happen in a few weeks? You can think about these things ‘til you’re blue in the face and you still won’t know. All it really does is knock you out of is being present to this moment. 

You can’t constantly live in the future, because if you are, you’re missing being in the moment right now. The present moment is all we ever have. 

What else can traders do right now? 

For traders, whether or not you’ve decided to face these big market waves, you’ve got plenty of time to do your homework. There are so many great resources out there.

In the SteadyTrade book club, we recently reviewed ”Technical Analysis Using Multiple Timeframes” by Brian Shannon. It’s such a rich book — I could see myself reading it 10 more times and still getting something every time.

We’ve also covered a number of other great books that Tim, Stephen and I recommend:

• “The Inner Voice of Trading” by Michael Martin
• “Trading in the Zone“ by Mark Douglas
• “The Hour Between Dog and Wolf: How Risk Taking Transforms Us, Body and Mind” by John Coates.
• “The Daily Trading Coach” by Brett Steenbarger

I’m learning day trading, and I have almost completed Tim Sykes’ “Trader Checklist,” an in-depth course that’s so good! But as soon as I finish it, I’m ready to listen to it all over again from the beginning! It’s that valuable. 

Check out the SteadyTrade Podcast — there are so many diamonds you can discover in the 100+ episodes.

If it’s too volatile to trade, focus on doing your homework and working on your emotional intelligence. Learn how to be neutral, and how to respond rather than react!

Right now, you have a great opportunity to see if you can incorporate these strategies into your life. If you’re able to stay steady in your personal life, then you’ll likely be able to stay steady in your trading. They do go hand in hand. How you do one thing is how you do everything. 

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The Final Word on Your Coronavirus Trading Mindset

Keeping emotions in check is always a challenge for traders, but especially so in the age of the coronavirus… 

Not only is the market extra volatile, but many traders are also dealing with sudden life changes, stay at home orders, and uncertainty about the future. 

Whether you’re embracing the volatility and trading up a storm or taking this time to hit the books and study, it’s important to do what feels authentic and right to you. Every trader’s mindset and approach will be different — be true to yourself and stay safe.

How has the coronavirus affected your trading mindset? Leave a comment and let us know!