By Steve Papale
Fall is here. In the Midwest cooler weather has replaced the summer air. So people and animals are preparing for the winter soon to come. In Canada, a homeowner discovered that more than a few snakes decided his house would provide a nice place to hold up during the cold Canadian winter. It seems there were something north of 100 snakes in this guy’s house. At that point the local “snake swat team” came in and got them out. Must have been interesting being in that house when the discovered they had all those snakes hanging around.
News flash: Markets are moving up and down a lot these days. For some, these days can be a bit of an emotional roller-coaster. Let’s face it, trading can be an emotional business. And letting our emotions take over can lead to bad decisions. But get yourself centered – there are a few things we can do that will help us control our emotions while trading.
First, have a trading plan. Knowing what you need to do ahead of time can relieve the stress of having to make a decision while markets are flying around. This can be easy when taking profits. No so much when it means a loss. It’s normal to want to wish the market to where you want it to go. But think of your trading like a business. Every business has a cost of doing business. Getting out at the worst price sometimes is simply a cost of doing business. All businesses have it. And once you have a plan stick to it. Do your re-thinking and re-analyzing away from market hours and live trading. No one gets smarter during a trade.
Next, don’t drink and trade. Some get braver while drinking. I’ve seen this combination blow up people’s accounts. Sleep at night and exercise at least a little each day. Stuff we learned as a kid. It still works. Drink water and eat at least some healthy food each day. I drink a lot of water but I need to work on more healthy food (pepperoni pizza has the basic 4 food groups right?). Leave the markets alone after hours. I used to check futures overnight and get calls from clerks at 2 am. Probably hurt more than helped. Finally, keep it all in perspective. It’s important but it should not be your life.