Once traders get the hang of E-mini trades, it’s just a matter of time before they fully get absorbed in their day trades. There’s one factor every trader should remember however, and that is keeping ones stress levels under control. To accomplish that, it is highly important to know exactly what to do.
Here are 9 ways of how you can reduce your stress as a day trader:
- Trading on higher time frames:
Market prices are noisy, which means that the lower the time frames, the more the amount of noise. Now, noise in this case is quite similar to uncertainties. The more a person is uncertain about the actions to take, the more his/her stress levels. - Using limit and stop-loss orders:
Traders usually make the mistake of not minimizing losses. The use of limit orders and stop loss orders definitely helps in reducing the stress that is caused by taking real-time decisions in day trading and by taking great losses. - Having exit points predetermined and acting on them:
A trader should not only know what his/her profit objectives are before placing the trade, but should also be able to act on them when the prices reach the objectives. - Having entry points predetermined and acting on them:
Just as exit points, a trader should not only know what the entry points are but should also be able to act on them before the trade is placed and when the prices are reached. - Are you a systems trader or a discretionary trader?
System traders are generally exposed to lesser stress levels, which is basically because they do not need to make exit or entry decisions during their day trades since they are already programmed in the system. Discretionary traders on the other hand are exposed to more stress comparatively, because they have no choice but to make exit and entry decisions. - Position sizes on the next trades also cause stress:
Understanding the unpredictability of the market and having it quantified in a particular way allows traders to adjust their position size accordingly. - Try not to trade news releases:
The market usually reacts when news objects are released. Even if you expect the market to react in a particular manner, there is an equal chance that the market may end up over-reacting. This can lead to losses since your stops will have a negative impact. So, it is always better to avoid trading news items. - Overtrading can lead to more stress instead of more profits:
Overtrading generally leads to more unnecessary stress instead of profits. This in turn leads to more losses and risks. Sometimes you may be trading many markets at once. Reducing the number of markets you trade is definitely going to ease off the work load from you. So, while you may be thinking that overtrading should help you, it can instead lead to great losses and stress. - Reconsider the positions, security and stocks you trade:
To reduce your stress levels, you will want to reconsider how many positions you have, how many securities you are trading, and whether you are watching many stocks at once.
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