Managing Emotions While Day Trading

  • Thread starter GetRichOrDieTrying
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Managing your emotions while day trading is what separates winners from losers. It's not the strategy, technical analysis, etc. That's the easy part.

That said, what works for you? How are you managing your emotions?

I have a trading strategy that I have throughly backtested. It's a profitable tragedy. The problem is that my winners are often smaller than my losers because I sell too quickly from the fear of loss.

How do you overcome this?

I've recently thought about setting my profit target, entering a trade and walking away and letting it either hit my profit target or stop loss.

Is that a good idea, or is that irresponsible or short-sided?


New member
It could be that you're strat is built to look good on a ToS backtest, so you might want to check that out. It's easy to write a script that builds up an insane 1,000 ROI, but actually loses in real life.

You could try paper trading or playing with a tiny amount of money first and see if your return is similar to what you would have expected in that time period. If so, you have nothing to be afraid of :)


New member
Ok then you have a problem called fear of loss and you are not able to accept the loss(defeat) consider this

1.Trade location-choose your trade location in a way that you have a defined risk and you are happy with that risk.(reduce the number of contracts if the risk is too big)
2.Bring you stop loss to break even or take partial profit on the way on some contracts.
3.If your strategy is good then you will win in long run(series of trades) You CANNOT define success based on few trades.
4.Remember once you put on a trade then it can go either way ,therefore you must be at peace with loss should it go against you.

Watch you tube video by mark douglas-psychology of trading


There are many aspects that need to be considered when it comes to trading... Self-discipline is an ongoing learning experience, even for seasoned traders... Whether entering a trade at the wrong time or holding out for a reversal of losses can severely damage your trading account... Been there, done that...

FOMO, or Fear Of Missing Out, can cause a trader to jump into a trade without validating indicators and will invariably lead to increased losses... I fight this every day as the trading session opens each morning... If the market is up at the open it can be difficult to hold back from jumping into a trade to ride the market up when prices are rising rapidly... Unfortunately, more times than not, without validating through indicators, you will enter trades either just before or just as momentum is diminished... The trade goes the wrong way in a hurry and you can potentially turn what was expected to be a winning trade into a loser... Do that on a couple trades right at the open and you can turn what could be a profitable day into one where you are just trying to recoup your impulse based losses with what capital... Sometimes it's best to just sit on your hands and watch how things shake out before entering any trades...

FOL, or Fear Of Losing, is another way to lose a lot of money quick... It can be difficult at times to accept that a trade hasn't gone the way you had envisioned prior to opening the trade... You may think the trade will recover so you move your stop loss to allow more room for a turnaround... Then as the trade worsens you move it again, and perhaps again, hoping that you can turn your losing trade into a winner... That rarely happens... You end up in a trade that has little chance of being salvaged... And if you tried averaging down throughout the process you have only compounded your problem... If you think closing only part of your position will help, think again... Due to the FIFO, First In/First Out method used for positions, closing only part of the position will incur the greatest losses, overall... If you truly want to wait for a reversal you should hold the entire position because you incur the biggest loss by closing what is essentially your opening position first... However, if you get lucky, you might be able to increase your position size and recover if you can increase the position size once a reversal happens... But this is rarely a successful strategy, especially when day trading - but a possibility nonetheless...

Confession time... I lost a major portion of my trading account back when the market plummeted earlier this year... The first Friday the market started to collapse was my most profitable trading day to date and, I have to admit, I got a bit cocky... I loaded up on option contracts late in the day, as I had done successfully many times before the collapse, and over-positioned my account funds... I had visions of getting rich quick come the opening bell on the following Monday morning... You can probably guess what happened next... Monday morning came and the bottom fell out of the market, leaving virtually all of my option contracts WAY out of the money... I had no choice but to watch almost all of those option contracts expire worthless because I couldn't even sell them for pennies on the dollar prior to expiration... My winning streak had ended in a big way... So much for getting cocky... Way more than a few thousand lessons learned the hard way... Then I took a couple more hits in the following weeks as things went from good to bad in a hurry, as the markets plummeted after rallying, and I was reluctant to take early losses which, subsequently, turned into bigger losses... I finally got rattled to the point where I didn't trade for a number of days... Once I started trading again I got overly cautious and backed out of a few trades prematurely, which led to more losses - albeit much smaller... Many of those trades turned profitable as I sat on the sidelines with no more trading funds for the day... All of this happened when I had a full understanding of exactly what was happening... Jumping in too quick, due to FOMO, and jumping out too quick, due to FOL... I spent long nights poring over the days charts, proving that I truly know how to trade and was simply making dumb mistakes that I knew were dumb when I made them...

So, how did I get back to normal trading without getting rattled into making bad choices...??? I pored back over everything I was doing... I checked every study and strategy I had been using, settings and all, to make sure they truly worked for my trading style... Those that weren't a good fit were dumped... Those that were a good fit were kept and tweaked for optimal performance... When a trade unexpectedly goes bad, I get out before getting mired in losses... I take small profits when necessary rather than allowing a good trade to go bad due to greed... If the markets aren't working for me, or I don't feel like I'm on top of my trading game, I don't feel bad about walking away from my trading station... I remind myself that there will be more trades and tomorrow will be a better trading day filled with ample opportunities... The more money I have to make profitable trades with, the better off I will be - both psychologically and financially...

Sorry for being long winded but if my experience helps anyone avoid the dumb mistakes I knew I was making then it was worthwhile...


A channel I discovered recently that has a lot of good content and am really enjoying is traderTV Live. They also have a live trading channel for the morning trading time period of 9 am to 12 noon EST. Here is their vid on FOMO and dealing with it.



Active member
I don't discount any of the psysch stuff but have two suggestions-

1. think of trading like running a walmart, lots of stuff for sale, but if today people buy hula hoops, you buy and sell hula hoops. if tomorrow they want tricycles, well, ticycles, it is. You're simply looking/hoping to find a wave and ride it a little.
2. try reading 'reminiscences of a stock operator', old book, but valuable lessons. basic idea is names of the players change, the things they do never change.

Good luck, make millions!
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