The basis of trading is determining when to enter or exit the market. This is a substantial decision to make. It should be preceded by careful market analysis. Sometimes, emotions cloud proper judgment. Traders should work on keeping their emotions in check. Today, I offer you some tips on how to deal with hesitation.
Hesitation in trading
Hesitation is pausing, postponing making a decision, doubting. It is a moment you are not doing anything, unsure of what should be the next step. In trading, it sometimes happens when traders are about to hit the sell or buy button. There is often fear behind hesitation. You are afraid of losing money, so you wait too long with opening the position. Or you have opened a transaction and see the price going in an unwanted direction and instead of cutting loss short, you are waiting for the trend to reverse, hoping it will happen sooner than later.
Have you heard about the experiment on rats where they stood before the choice, food or experience of pleasure? What do you think they would rather choose? I will tell you. They have given up eating in order to feel pleasure.
We are human, but sometimes we behave the same way. Winning is a pleasure for traders. They want it badly. They do not want to experience pain which is losing. And this leads to hesitation, inability to take action.
How to enter the market without fear
There are some things you can do to deal with hesitation in trading. I cannot promise it will be easy or fast. But with a little patience and determination, you will overcome problems.
Prepare a trading plan
A trading plan is a must. You cannot start trading without it. It is something that should serve you in preserving your capital and generating steady profits. It should include things like the amount you want to invest in a single trade, the number of trades for a day, how many trades you are ready to lose before you close the session and so on. The trading plan is something personal. It should be tailored to your needs. Every trader has different preferences and skills, and a good trading plan should take them into account.
Use a stop loss
There is this tool called a stop loss that automates part of the trader’s work. You choose a level for the stop loss, and your position will end automatically when the price comes to this level. You should carefully think about the place to set a stop loss. Not too far, not too close, so you will have a chance to earn some reasonable profit without risking too much. Use the stop loss tool to minimise losses.
Play different scenarios in your head
Imagination is a powerful weapon. Creating pictures in your head will not magically turn all the transactions into winning ones, it may, however, help to overcome fear and hesitation and to take action on time. You can, for example, imagine that the next trade will bring you huge profits. Maybe even the biggest in your career. Your attitude will change into positive thinking and fear will reduce. And if you lose? Well, try to look at the losses as the costs of the business you are accomplishing.
Another game you can play in your head is imagining that someone else is facing this decision, not you. Perhaps the best friend, or a professional trader whom you trust. What action would he take? Or what kind of advice would you offer? Such thinking will change the point of view, and you will see more clearly what to do next.
Affirmations are sentences that you repeat over and over, so they have a chance to internalise. This is a psychological method to shift your thinking. You should repeat them every day for some time until your subconscious believes they are true. What affirmations can be useful in trading? You can say “I will use a stop loss tool”, or “I will be faithful to my trading plan”, or “I will take action when I receive a trading signal”.
There are no guarantees in trading. Traders sometimes win, sometimes lose. But there are some actions you can take to increase the chances of gaining profits.
Always begin the trading session well-prepared. Keep your plan ready and follow it. Make an intention to place stop losses because they can help you to decide when is the right moment to get out of the position. Think about protecting your balance account in the first place. Once you are able to preserve the capital, you may work on earning more money.
Reduce your hesitation by using your imagination. Play games in your mind and repeat affirmations that serve you.
Do not forget, there is a free demo account on the Olymp Trade platform. Practice there and once you are happy with your trading decisions, move to the real account.
Best of luck!
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