Keeping a lid on emotions is crucial for traders seeking to maximize their investment potential.

January 3, 2017 | Rocco Savage

In this article, Idan Levitov highlights some of the key aspects of successful trading including the importance of creating (and sticking to) a rules based system, effectively managing the ups and downs of a trade, and properly managing your psychology.

When using a bot in the Alta5 platform, all three key aspects are not only automated, they are enhanced by computer-level analysis, execution and management.

First, at the heart of each bot is a rules based trading system. These written rules are the guidelines the bot follows when searching for trading opportunities, executing trades, and managing positions. Second, bots effectively manage the ups and downs of a trade and never sway from that system. Bots always come to the table with a neutral psychology so when a swing happens there is never a decision made based on an emotional tilt. Last but not least, bots stay neutral because they are not emotional beings. There are no adrenaline rushes, releases of cortisol, or dopamine blasts happening inside a bot’s head. The emotional rollercoaster that many times puts us on the wrong side of a trade can be completely removed from the equation.

One of the most important components for investing is having a game plan to set the rules that guide the open and exit for a trade. The hallmark of a professional trader is the ability to behave as machine-like as possible when they make crucial decisions.

While it may seem simple in theory, in practice, decision-making is subject to many psychological pitfalls that can negatively impact our judgment, or worse yet, harm our investing returns.

Managing your emotions while maintaining a disciplined and balanced psychological state is a difficult process. However, mastering your own mindfulness will not only help you discover the keys to sustainable investing success, but also help you weather the emotional ups and downs of trading.

Why Your Psychology is Important

For anyone who has ever made a trade, you are probably familiar with the accompanying physical effects. Individuals who are newer to trading feel the rush of adrenaline and also an accelerated heart rate.

Trading is exciting, but it can be equally nerve racking. Besides just the physical manifestations of trading are the psychological attributes that complement them.

Oftentimes, our emotions while trading can be categorized by a rollercoaster of happy, sad, stressed, elated, and even angry. When we make winning or losing trades, our psychology can shift swiftly, making normally easy decisions more agonizing.

The more we let our emotions take control of our investing strategy, the more likely we are to wind up on the wrong side of a trade.

Read the entire article at: Unlock Your Investing Potential by Carefully Managing Your Psychology

 

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