How to Manage Stress in Trading: 10 Tips

One thing is clear in today’s world: stress is everywhere, for all sorts of reasons.

Work is more precarious than it once was, the myth of endless growth keeps taking hits, the limits of our planet are finally dawning on us, not to mention the more or less occasional episodes that don’t help one bit — like Covid, a visit from the in-laws, and so on and so forth.

Everyone regularly has excellent reasons to feel the stress building. And in trading, it’s exactly the same!

Stress in Trading | Defining the Condition

To make effective progress in this new Mindset tutorial, let’s start simply by recalling a basic definition of stress.

According to the Larousse dictionary, it’s a “reactive state of the organism subjected to a sudden aggression.”

I’d add that it’s a state of arousal (negative or positive) that prevents us (to a certain extent) from building perfectly coherent verbal or behavioral responses.

Now, in trading, the coherence of our responses to the market is essential. You can’t let stress steer you — so how do you avoid that?!

So I figured it might be useful for you to know a few of my tricks for avoiding needless stress while you trade.

How to Manage Stress in Trading: My 10 Tips

1. Staying calm comes down to sticking to your plan!

Moving your Take Profit and Stop Loss levels around is not what’s going to relax you — quite the opposite.

2. Avoid stress with precise risk management

If you respect your risk management, losses will quickly stop being a source of stress. They’ll become part of your daily routine. Risking 1% per trade, as I suggest to my students, lets you play the long game!

3. Ensure your comfort

Comfort is very important so that your decision-making process isn’t disrupted. That means good equipment, a good chair, spotless hygiene in your workspace — and for your body too! Just because you plan to work from home doesn’t mean you should stop taking care of yourself. On the contrary: you have more time since you’re not commuting to the office, so make the most of it.

4. Visualize your path to success

If you don’t know where you’re headed in your trading or in your trading education, it’s only natural for stress to take hold of you. It’s the same as being lost with no idea how to get back home. If you don’t have a well-defined plan, or if you don’t really know where you stand in the process, it will be hard to move forward with a clear mind!

5. Manage your stress by slowing the pace

Sometimes that’s a great solution! You may be good in certain market conditions, but that’s not necessarily the case all the time. So you need to know how to slow down, pick your trades sparingly, and focus on the essentials!

6. Appreciate the good moments and the good things

Being grateful for what you have matters, because it reminds you why you work. Even when you don’t have much, it’s important to fight for your slice of the pie! I’m thinking of the material side, of course, but also of your personal situation: health, friends, family, hobbies and passions, and so on.

7. Reduce stress by staying attentive

Move forward with your eyes wide open! Pay attention to every element you plan to watch in order to make your decisions, but also look out for yourself. It’s normal to see things through when you’re motivated, but it’s not normal to come out of it burned out and depressed. Know when to call a halt so you can recover your strength whenever it’s needed.

8. Manage your stress by letting go of stubbornness

As mentioned earlier, when you want something, it’s natural to want to see it through no matter the sacrifices. That said, when something isn’t working in trading, move on and develop new methods and strategies. Don’t wait until you watch your capital melt away before you change!

9. Conquering your emotions is essential to avoiding stress

Making decisions out of fear, greed, or any other harmful feeling won’t help you succeed. When you enter a position, it must be based solely on your rulebook. After that, it’s all about sticking to the plan — right to the end!

10. Be ready to cut your losses!

Here we come back a bit to number 8, but more precisely: you have to learn to exit a position even if it usually works out. Your invalidation levels must be clear and respected once they’re crossed! Since losses are a regular part of trading, it’s important to know how to lose cleanly…

Managing Stress in Trading | Conclusion

If you can’t manage your stress in the markets, you won’t last long in crypto trading, or in the crypto markets in general. You can think of this aspect as one of the pillars of your longevity. Even if you put up with it for several months, you’ll eventually grow disillusioned, with burnout or a nervous breakdown on the horizon!

As I’ve already said, it’s perfectly normal to want to see things through when you have a goal, but if you can’t relax and stay relaxed, I wouldn’t give much for your chances!

That’s why I sincerely hope these simple tips will help you manage your stress day to day, so you can perform by making logical decisions!

If you enjoyed this tutorial and want more, keep exploring!

Dig around in our blog dedicated to crypto trading, because there’s plenty more content in this vein!

!!! One last thing !!!

If you’re planning to get into it, I recommend dYdX, a decentralized exchange, and for several reasons:

1. It’s a decentralized exchange run by its community
2. No KYC required — you can trade futures without limits, anywhere in the world
3. The Testnet is solid! You can try your hand at trading without burning through your capital
4. Trading fees are ZERO below 100K in monthly volume.
5. It’s a profitable platform, and therefore a viable one.

WARNING: If I recommend certain exchanges, it’s only because I use them regularly in my own trading for very specific reasons!

WARNING²: I don’t recommend anyone store their crypto on an exchange, whether it’s a DEX or a CEX; you’re never safe from a hack or from ill-intentioned managers, no matter how good the exchange in question is.

WARNING² again: You remain solely responsible for your crypto, so stay vigilant and don’t hesitate to set up a rigorous security process that involves withdrawing all your crypto from exchanges once your positions are closed.