4 Ways to STOP Impulse Trading

How do I STOP Impulse Trading?

Just a reminder.

An impulse trader is one who makes quick, irrational decisions to take a trade (long or short) for some form of immediate satisfaction it may bring in the short run.

Impulse trading might occasionally work.

But it's risky and can damage your trading confidence and psychology in the long run. That’s because when you win, you’ll take more impulse trades that go against your strategy.

But then the winning streak will end and the losing streak will come. And that’s where you’ll blow your portfolio eventually.

So, to help you overcome impulse trading, I suggest these three solutions:

Solution #1: Take a break

When you feel the urge to make an impulsive trade, step away from your computer for an hour.

Use the time to go cook a meal, go for a walk, or do something else that helps you relax.

Then when you’re feeling more relaxed and in tune, you can come back to trade the markets with a refreshed, rational mindset to see what has or is lining up.

Solution #2: Reflect on your trading history

Review your trading track record.

It is your game plan. It shows you the potential of what is to come.

And it allows you to look at your past data and trend of your portfolio.

Consider the gains and losses you've experienced and remind yourself of why it is super important to stick to your trading strategy.

This alone should help you resist impulsive trades.

Solution #3: Set specific conditions for impulse trading

If you still struggle to control your impulsive trading instincts, then this might be the best idea.

Open a separate trading account with disposable funds.

This way, you can indulge and take your impulse trades without jeopardizing your primary trading strategy and account.

Maybe it’s a R10,000 or even a R50,000 account.

Or if you just want to trade for trading sake it, it might be a R5,000 account.
Whatever it is.

When you feel impulsive, trade using your impulse trading account.

And then when it comes to your main account, you’ll be able to follow your specific trading strategy according to your track record.

Remember, trading should be approached and seen like running a business, not like playing a slot machine.

Keep this in mind, and this should help save your portfolio.