The Counter-intuitive Way To Control Your Emotions In Trading

By | May 25, 2015

I don’t know any trader who doesn’t struggle at times with their emotions. Likewise, I don’t know any trader who doesn’t wish that they could control their emotions better. Here’s an excerpt from an email I just received from a trader named Srinivasa:

I have a problem with hesitation. Even though I have a strategy that fits my personality and is consistently profitable, I still hesitate on 2 out of 5 trades. And for some strange reason I always hesitate when the profit would have been the best. My whole body senses that I need to take the trade, but it’s almost like I have another person in my mind who controls me and holds me off from following my intuition.

I’m sure we can all relate to this. I know I can. Sometimes it feels like our emotions literally take over and we are hostage to them. Almost like it’s another person in our mind, as Srinivasa notes. So the natural question becomes: how do you control your emotions while trading?

And the counter-intuitive answer is: You stop trying to control your emotions.

You see, what you have to realize is that it’s not really your emotions that have power over you. Rather, it’s your resistance to your emotions that gives them power over you. Have you ever stopped to think about what an emotion even is and why it’s so powerful? It’s just a feeling after all. So why does it have so much control over you?

The Kid That Has You Enslaved

Picture this: You’re holding the wrist of a kid that is much smaller than you. You’re holding it extremely tight and you won’t let go. But you’re not aware of this. You’ve been drugged and have lost your spatial and bodily awareness. You think he’s holding onto you. Everywhere you go, this kid follows. He sticks to you. You want to get rid of him but you can’t. He seems too powerful and you feel helpless. The more you resist him the more powerful he becomes. Soon you’re at his complete mercy, as he drags you around and controls where you go.

In this analogy, the kid is an emotion. In reality it has no control or power over you, and it’s you that’s holding on to it. And the more you resist it the more powerful it feels, until it literally feels like it’s controlling your every behavior. But it’s just like that little kid. It has little power of its own. You are giving it the power over you.

Do What Feels Unnatural

What if you stopped holding on, resisting, and fighting the emotion? What if you welcomed it instead? I can tell you from extensive experience that this can be one of the most powerful practices you can undertake. Welcoming the emotion is the equivalent of letting go of the kid’s wrist. You’re no longer holding on for dear life and resisting so much. Rather, you’re realizing that it’s just a feeling. And you’re realizing that no matter what that feeling is, it’s OK. It’s OK to feel it. It’s not bad and it’s not wrong. It’s just a feeling.

For instance, if you feel anxiety and panic when entering a trade or when trying to hold for a large profit exit, instead of fighting that feeling and trying to control it (which makes it become more powerful and much larger in your mind), try welcoming and letting the anxiety and panic be there while you sit in a place of still awareness. This feels very unnatural, because our first inclination is to push it away. But if you allow yourself to feel it- even welcome it as you would welcome a friend or a nice feeling- you quickly realize that it’s okay. Panic and anxiety make us feel like our life is in danger and to escape the feelings we behave in a way to make them go away. i.e. We either skip the trade or exit too soon. But if you stopped resisting and let yourself feel the emotion, you would realize that it didn’t kill you after all. And instantly its ‘power’ would dissipate. It wouldn’t be as big of a deal in your mind and you’d quickly feel it as a decrease in the strength of the emotion.

Ultimately, you’ll end up finding out that giving up trying to control your emotions- or like in Srinivasa’s case, the other person in your mind- gives you much greater control. You’ll never be rid of your emotions while trading, so stop trying. They’re actually often a great source of information. Instead, welcome them and feel them from a place of awareness (as if you’re watching them), and let go of your hold on them. They’ve never been the ones controlling you. You’ve always had the control without knowing it.

6 thoughts on “The Counter-intuitive Way To Control Your Emotions In Trading

  1. Rakesh

    An amazing piece which clearly demonstrates Bramesh’s mastery of yet another key to trading success.

  2. vinod kulkarni

    “For instance, if you feel anxiety and panic when entering a trade or when trying to hold for a large profit exit, instead of fighting that feeling and trying to control it (which makes it become more powerful and much larger in your mind), try welcoming and letting the anxiety and panic be there while you sit in a place of still awareness.”

    This is the best piece of advice I have come across. To be aware of what is happening gives you control over the situation.

  3. Harsh Mehta

    Best way i found to control emotions taking over you and your trade is to trade only towards end of the day..

    firstly, sitting in front of the screen waiting to make your move and then waiting after you made your move, is frustrating. From frustration emerges all kinds of emotions.

    So cut the time you sit in front of the screen, trade for trend rather than intraday trade..

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