Emotions are natural, valuable, and often – but not always – a good thing. Having feelings is a big part of what makes us human. Those feelings make experiences feel richer and more vivid.

However, there are definitely times when logic and rational decisions should be your top priority. That includes just about any major financial decision in general, and trading in particular.

Why? Because money is a valuable asset and, for so many of us, you need to work hard to get it. Making logical decisions based on evidence and analysis will usually get you closer to making money than choices based on emotions or vibes. Thinking the situation through and acting based on evidence means better results than simply reacting based on emotions.

To put it simply, emotionless trading is good trading. Yes, markets are influenced by emotions and irrational reactions to economic news and geopolitical events. And it’s crucial to understand those reactions as part of your broader trading strategy.

But that understanding should still come from a rational mind, one that’s looking at how emotions can influence the market and making a logical analysis in response.

So, how can you make your emotions in trading numb, avoiding feelings like fear and greed in trading that trip up so many traders? Here’s a quick guide to mastering your emotions as a trader.

Looking for a more in-depth dive into the role of emotions and psychology in trading? Our comprehensive guide will tell you everything you need to know about the topic.

Building Your Emotionless Trading Strategy

Getting a Handle on Fear and Greed

Fear and greed are both common emotions in trading, and neither one will do much to help you win more trades and earn more in profit splits.

Fear of losses can encourage choices that are too safe – decisions that can mean missing out on what could be a winning trade, as Babypips points out. Fear of missing out (FOMO) and greed both tend to push traders toward the opposite, too much risk in pursuit of another win.

The middle ground, an appropriate level of risk driven by analysis and trading strategy, should be the target for every trader.

As is often the case when you feel a surge of emotions, the best approach for traders is taking a step back. Feel your heart racing or have trouble concentrating? Take those as signs to pause for just a little while.

Think about what changes in the general market or the specific positions you have open made you feel that way. Review your trading strategy, take a look at your recent analysis, and do some more analysis if you notice that something is missing or you need more context.

To put it simply, when you feel greed, fear, or any other emotion, take a little time to calm down before making your next decision.

Developing Good Trading Psychology

Our Trading Psychology video series covers everything you’d ever want to know about trading psychology, including mistakes to avoid and ways to improve.

For now, let’s cover the basics. Here’s the basic and critical takeaway: Good trading psychology doesn’t mean ignoring your emotions, it means understanding and controlling them to make better choices as a trader.

How can you do that? There are plenty of ways to change and build your mindset around trading. For example, you could:

• Get in the habit of regulating your emotions. Regular meditation or practicing mindfulness – looking at a situation without emotion – can help you be emotionless when trading.
• Review your trades regularly. Successful traders frequently look at wins and losses to find out what went right or wrong. Whether it was an emotional mistake or an issue with your strategy, reviewing trades gives you more insight into what you should keep doing and what should change.
• Use a trading journal. A trading journal is a great tool for reviewing trades. It gives you an easy source to reference if you want to look back on past performance. And, writing down your thoughts can help you remember your past trades as well as encourage mindfulness while actively trading.
• Consider, update, and improve your process. Emotions aren’t always the issue when you lose out on a trade, but a losing trade often leads to negative emotions. Reduce your emotional exposure by regularly reviewing your trading strategy and process.
• Change your mindset. As long as you build a consistent trading strategy and regularly follow it, you shouldn’t think of losing trades as failures. No trader has a 100% win rate, so try to look at your losing trades as learning opportunities instead.
• Be positive and highlight your accomplishments. The right mindset can go a long way in trading. Being positive while not getting too high or low emotionally can bring you closer to more consistency and success.

The Right Environment to Support Logical, Emotionless Trading

A key part of how to make your emotions in trading numb is putting yourself in the right kind of physical space. A calm and consistent trading environment can reinforce your logical approach and allow you to leave your emotions at the door.

The specifics can vary from one trader to the next, but in general, you should aim for a quiet space that doesn’t have many distractions. That doesn’t always mean absolute silence and a sterile space. Some atmospheric music, pleasant scents, and decorations can all help.

Think of what helps put you at ease and on an even keel emotionally, and use what you know about yourself to build your trading environment.

Trade With The Best

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