Since yesterday we have seen noticeably increased volatility in some major markets and big movement in the markets we focus on (indices, FX and commodities). Days like this are exactly what day trader lives for, because of the many money making opportunities that are presented throughout the trading day.
Even today kicked off decently during the London session the Forex markets started moving lots, gold was holding the daily low and WTI made a bull breakout, which I grabbed thankfully. - But the day is only beginning, I expect some big things to come out of the US session.
Back to the post, during these types of trading times, when high volatility comes, it is easy to get worked up because you realize that this is such a good opportunity to make a good amount of money that one might start trading with FOMO, but that's never a good idea. You know the feeling before anything exciting? Like a big game, an important big date, Christmas, a Birthday, or even your wedding day! Those times when the adrenaline is rushing and you find your self a little anxious even before the "event", that is how yesterday was!
Since I trade full time I always have the luxury of being around for these kind of events and in the past when I didn't pay attention to my "internal dialogue" (mindset) I was excellent at working myself up (getting excited) which only lead me to take my eyes off the prize and lose composure.
It is easy to get frustrated, FOMO'd and lost when there are these type of opportunities are out there, and if we do not control our internal dialogue then the chance of things not working out in our favor increases.
I made a post about my trading yesterday, you can read about it here.
You'll understand the mistakes I did yesterday with my trading, but over night I had a longer think about my morning and found further information that could help you in your trading too. I guess this is a follow up post to yesterdays one in which I explain what I did to recover, but in this post I want to go deeper into psychology when it comes to day trading.
IF YOU WANT PROFITS, CONTROL YOUR EMOTIONS.
Here's the deal, and this is a fact, if you don't control your emotions they will control you. Yesterday I was quite excited and expectant to have a good day, which only lead me to rush, not do the necessary work and overall take losses from trades I shouldn't be taking losses.
I did end the day with profits, I recovered a decent sized loss, but it could have been a really bad day if I didn't intervene as I was becoming a bit reckless as things did not go my way at the open, basically I could have turned a small problem into a major disaster.
The mindset I had in the morning was clearly affecting my ability to read charts, deal with breaking news, and gauge the market to consistently make smart trades and take good profits. I was hindering myself because I had steadily worked myself up and set high expectations instead of approaching each situation with a clear mind that would be conducive to a good day trading. When I finally took a deep breath, and approached things without the expectations and did the things listed in yesterdays post, which again, you can read here, and that made all the difference!
I hope these two posts get you to understand completely that mindset is the MOST IMPORTANT component of successful/profitable trading.
I eventually worked myself into good positions that were manageable and profitable. I made a few solid trades that were fully based on the primed traders system, day trades and scalps, but it was my attitude that made the difference, because at the end of the day all we have to do is follow the system but if our mindset is messed up, we'll miss the opportunities that the markets present, and when there is volatility you need to be "cold hearted" and have no emotions, just be focused, hypnotized like, on the task at hand and that is execute the process by being proactive to the charts.
Here is my tip to anyone of you that may find themselves in this type of position: Just relax, take a deep breath, open up your eyes, clear your mind and trade your edge. See the market for what it is, not what you think it is supposed to be. And react accordingly.