STOP Impulse Trading at once – 5 Actions to take

One of the most dangerous traits a trader can adopt is…

Impulse Trading.

This is where they take trades mainly on emotions and gut rather than sound financial analysis.

This means, more risk, more irrational choices and that can lead to steering away from what works.

Your proven trading strategy!

And the end result, you’ll lose in the long term and end up with less confidence for your future endeavours as a trader.

So let’s come up with certain ways for you to STOP the impulse trading.

ACTION #1: Give it an hour

When you feel the urge to make a trade based on emotions, it can be helpful to step back and take a break.

One great way is to wait for an hour before you make any decisions.

Go get something to eat, grab a beer, go walk your crocodile or go do something other than trading.

Close your computer if you feel you’re about to impulse trade.

This break can help you regain a sense of perspective and avoid making impulsive decisions that you may later regret.

ACTION #2: Remember your long term goal

I always say…

Financial trading is a long-term game.

You need to have a clear and specific long-term goal in mind that guides your decisions.

When you feel the urge to make an impulsive trade, take a moment remember your trading record, journal and what works.

Also, remember it’s not about the one trade but the hundreds of trades later…

Ask yourself whether this trade aligns with your overall strategy or whether it’s just a momentary impulse.

This can help you stay focused and disciplined in your trading.

ACTION #3: Revisit your journal

Your journal is pretty much your game-plan.

It foretells of the most probable outcome when you follow it.

And it should include a record of all your trades, your thoughts and feelings at the time of the trade, and the results of the trade.

When you feel the urge to make an impulsive trade, take some time to revisit your journal.

Look at your past trades and the results they produced.

My favourite…

Go look at your drawdowns. Go look at your biggest drawdowns.

Then go see how you came out of the drawdowns and your portfolio headed to NEW all time highs.

There is no better feeling than that. Do this and I doubt you’ll want to take any impulse trades again.

ACTION #4: Read more trading psychology

Mind is everything with trading.

It’s a great way to develop your discipline and avoid impulse trading. Either go read trading books, articles, watch YouTubes or just save this article.

I can almost guarantee… If you read this article, when you feel like taking an impulse trade – You will stop that primitive way of thinking.

You’ll stop that inner conscience from trying to ruin your trading performance.

ACTION #5: Avoid Overtrading

If you find you take MANY trades at a time…

You’ll be more inclined of taking impulse trades, because you feel you need to take more.

Try and have a cap when it comes to the number of trades you hold.

I used to never hold more than 5 trades.

But over time, with adopting into new markets and evolved markets – that number gone up.

Now I make sure I never have more than 12 trades opened at any one time.

Remember to give yourself time to reflect, keep your long-term goals in mind, revisit your journal, and read more about trading psychology.

Let’s bring back the 5 actions to avoid taking any impulse trades.

ACTION #1: Give it an hour
ACTION #2: Remember your long term goal
ACTION #3: Revisit your journal
ACTION #4: Read more trading psychology
ACTION #5: Avoid Overtrading

Let me know if this was useful in the comments.