Even with the most carefully crafted plan at their disposal, some traders can struggle to avoid impulsive buying and selling. These unplanned trades often result in losses, so why do some of us find it difficult to stop? Often it is boredom, the search for fast gains and the fear of missing out that drives the problem. However, the good news is that there are many effective ways to get back on track.
Stick with the plan
When you lack a trading plan, you also lack direction, which is a major cause of impulsive trading. From wondering what you will watch to puzzling over what to trade, the start of each week is a confusing time. That’s why experienced traders spend hours going through the charts on a Sunday. This gives them the opportunity to view the markets in an objective way, draw their support and resistance levels and plan their attack for the upcoming week. Whether you work out your next sessions on a spreadsheet, a notebook or a napkin, don’t fail to plan.
Don’t stay loyal to one broker
If things aren’t working out with your broker, there is no reason to stay with them, even if the company is very well established. In the crypto world, there are many alternatives to Coinbase that offer a service to rival the US exchange. Take a look at the reviews on asktraders.com to learn more about why switching could be the most profitable thing to do.
Peruse the daily charts
Rash trading will rarely lead to big money gains, so use the daily charts to rid yourself of temptation. Checking through the data points and price movements forces you to slow down, focus on the chart and assess the information it presents. Whether you prefer position or swing trading, taking a long slow look at the charts will ensure your next move is calm and calculated.
Limit your trading time
If there is no reason to trade, it’s best to walk away from your screen for a few hours. Once you have a plan, it’s understandable that you’d want to put it into action, but if the market conditions are not right, accept that you need to wait. It takes patience and self-discipline, but try to react only when the setups are there. This will help you avoid the type of thrill-seeking, impulsive trades that cost money.
Discipline and profit go hand in hand
As soon as you learn to control your impulses, you’ll be on the road to more effective trading. Having a plan and following it is always the path of least resistance. It ensures you maintain a professional approach, deters you from thrill trading and won’t sap your energy. Understanding why you are sometimes tempted to make impulse trades can also help. Once you have an awareness of your triggers, you can bring them under control, keep your trades disciplined and enjoy more of a chance of winning a profit.
