Andrea Wylan
Sponsor
Huge spikes in market volatility can be exciting, fun, and profitable. They can also lead to disaster. Here are three simple suggestions for managing your trades and yourself in volatile times.
1. Have a plan. Know in advance where you are getting in or out – and be clear that you are okay with hitting your target or TAKING YOUR STOP.
(A client of mine just went through this, buying a stock since it is a great company and was so far down. His stop was passed in the overnight and then he was in the hole more than he planned.) Be clear what your options for exiting are – even the down side option. We get excited about the possible quick or massive gains and then seem to forget that price could actually go the other way.
2. Breathe. Try not to rush in from a place of panic. Breathe, slow down, and get strategic. Create the plan discussed in step one and follow it. Deep slow breathing steadies the mind, brings the brain more oxygen, and creates clarity. Conscious slow breathing is simple AND effective.
3. Sit back and observe yourself. Are you calm, or over excited about make a killing. Notice your thoughts (greed / fear) and sensations in your body (pounding heart, tight shoulders, etc.). If there is a great trade that is strategic and has a solid plan, great. Go for it.
If you don’t have a plan, but your mind is rushing you into action, use this opportunity to start to notice. . . how much are you not aware of what is happening inside your body and mind when you trade. See my blog for more articles on how important it is to become aware of your thoughts and feelings while trading.
1. Have a plan. Know in advance where you are getting in or out – and be clear that you are okay with hitting your target or TAKING YOUR STOP.
(A client of mine just went through this, buying a stock since it is a great company and was so far down. His stop was passed in the overnight and then he was in the hole more than he planned.) Be clear what your options for exiting are – even the down side option. We get excited about the possible quick or massive gains and then seem to forget that price could actually go the other way.
2. Breathe. Try not to rush in from a place of panic. Breathe, slow down, and get strategic. Create the plan discussed in step one and follow it. Deep slow breathing steadies the mind, brings the brain more oxygen, and creates clarity. Conscious slow breathing is simple AND effective.
3. Sit back and observe yourself. Are you calm, or over excited about make a killing. Notice your thoughts (greed / fear) and sensations in your body (pounding heart, tight shoulders, etc.). If there is a great trade that is strategic and has a solid plan, great. Go for it.
If you don’t have a plan, but your mind is rushing you into action, use this opportunity to start to notice. . . how much are you not aware of what is happening inside your body and mind when you trade. See my blog for more articles on how important it is to become aware of your thoughts and feelings while trading.
