A successful swing trader must stay detached and unemotional. They know that the markets are not “Out to Get Them” and don’t care about you. But amateur swing traders often have trouble achieving this rational mind set.
Stay Detached From Trading Decisions
The amateur swing trader take their inevitable trading losses and subsequent draw-downs personally. They take it as a hit to their ego and will attach personal significance to what is just an everyday fact; not all trades are going to work out.
Small losses should be expected and it’s vital that you don’t take them personally. What is important however, is keeping your losses small. You cannot allow any loss to grow into a big one. You accomplish this following disciplined swing trading strategies with optimal position sizing that is designed to protect capital.
Disappointment Is Natural
While its reasonable to feel disappointed, the worst thing you can do is take it personally and get angry at the market.
Disappointment and anger is natural but is the enemy of the trader.
In fact, if you take it personally, you might then try to gain back that small loss, by exiting your strategy and taking an ego inspired trade.
The odds are good that you will be the poorer because of it.
Swing Trading Requires Doing The Unnatural
We spend a lifetime building up an array of emotional responses to help us cope with uncomfortable feelings, the problem is though that the normal emotional responses are the exact opposite of what is needed to be a successful swing trader.
Swing trading requires you control your emotions. A lifetime of learning how to respond to uncomfortable feelings or situations has to be unlearned to succeed in swing trading (or any trading for that matter). The normal responses that are correct in personal and even business situations are a recipes for losses in trading.
Naturally you expect to make a profits swing trading stocks but in the short term, even a winning strategy is going to have losers. That’s just the nature trading, there is NO SUCH THING AS SURE WINNER.
So why take it personally when the market hands you a loss? Why put your ego on the line with each trade?
Why brag about your winning trades when you are lucky enough to have the odds work in your favor and then be depressed and angry when a trade goes against you?
While both emotional responses are perfectly normal, yet they are your enemy in swing trading!
So the question is: how do you control your normal emotional responses?
“Unlearning” A Lifetime Of Lessons
Swing trading isn’t about you. It is just a strategy to take money out of the market.
In most professions, probability plays very little role. You work hard to make sure you meet the expectations of the people who pay you, and you’re successful because of it.
In a traditional profession, it makes sense to put a little ego and pride into your work. Since your effort and talent usually have a direct payoff.
But with swing trading the odds can go against you. And it doesnt matter one bit how much work you put in to find the trade. ANY trade can go bad.
That’s a hard concept to accept for most people because it means that being a successful (profitable) trader is to some extent, just a matter of luck working in your favor. There is solid logic behind this seeming randomness. And a successful trading strategy will use this logic to profit. A successful swing trader will exit losses quickly.
He or she will not stay with a bullish or bearish position because of ego and their opinion. A trader will stay with a winning trade and not exit hastily just to lock in a profit.
That might feel good for a day, but if the profitable trade goes up another 30% or 50% you have lost out on a huge profit. Recognizing that trading is just a game of odds will take some of the glory out of it.
On the other hand, understanding that trading is a game of odds will help you cope with inevitable draw-downs and losses.
If you are a veteran swing trader who really has mastered your emotions you are assured that the odds will over time work in your favor.
You will be humble as the profits add up. You will quietly follow the signals for trades even when they don’t work out, knowing that eventually you will get back on a winning streak.By taking a detached, unemotional approach to trading may take some of the glory out of your wins, however that same unemotional approach is the real key to trading success.
Most importantly, an unemotional trader will take each trade consistently and knowing with certainty that over time the odds will make him or her a successful trader. By remaining unemotional, so that a trading strategy is followed in easy (profitable) trading conditions, but also during the tough and (unprofitable) times will lead to success in a field where the majority fail.
I personally still have trouble staying detached and unemotional from my trading decisions, which is the main reason I use swing trading services. This way I don’t feel bad and blame myself when I have the inevitable losing trade.
Make it easy on yourself and follow a professional swing trader who knows the rules of trading and can help guide you becoming a profitable trader.
Here are the two I use:
Regardless of which Stock Picking Service you use or if even if you choose to go it alone, please download my free eBook: “The 7 Habits of Millionaire Traders”
You can read all my reviews on stock picking services here:
If you have any questions, feel free to contact me.
– Robert Walsh