A look at trading tools that help you reduce the stress of your trading while you are away from your desk
Trading at its best should not be stressful, and not undertaken while stressed. A stressed or rushed trader is not thinking clearly and tends to ignore their trading strategy. Instead, a stressed trader will force trades, often only so that they can feel busy as they create a sense of “activity”. Forcing a trade that is not quite there can be detrimental, as a poorly implemented position can negatively impact your account balance. In the name of many happy trades, we provide you with a few techniques that will help decrease the stress of your trading and at the same time keep your account balance thriving.
- Automated trading
This comes in various forms; from the simple – setting automated alerts, setting automated stop loss and take profit levels, to the complicated – automated solutions where you can upload an algorithm that will automatically place trades on your behalf. Whether you choose the simple or more complex route is up to you, but once the automated trading is in place, it’s just a matter of logging in every so often to monitor the activity.
- Copy or social trading
This involves choosing an expert to undertake to trade on your behalf. This method started out as copy trading, where a money manager would be contracted to undertake to trade on your account. The positions of the trader would be copied from their account to the pre-set degree (the pre-set positions that protect an account from variability). If the manager is good and sets limits based on the account sizes and deposits, then it can provide good control for all clients, but it’s a system not immune from fallibility.
In time this evolved into social trading, where users copy trades from a variety of different traders on an open trading platform. Social trading users can ‘diversify’ amongst traders and set limits on their position sizes and exposure. Traders can also follow and copy experienced traders with different strategies or who trade different instruments to get varying exposure, and often for free. Keep in mind that traders are trading for themselves and are not focused on controlling their risk in line with the copier’s needs, although, there are risk management tools available to control this aspect. These risk tools cover everything from how many positions can be opened at a time, to the size of a position, to a number of pips that a stop loss and take profit can be set at.
- Set trading times/strategies
If you wish to trade for yourself, but you’re finding that the stress is overwhelming when you are away from the market, the most proven and straightforward technique is to set strict limits for what you can trade and when. The psychological impact of creating these rules allows you to relax when you are not trading and stops you from obsessing over the markets and positions. Your strategies should also reflect this method, focusing on the instruments with the best trading potential at your selected time.
- Mobile trading
If the problem is not enough access, then mobile trading is the solution. It may fly in the face of the other techniques which require a less hands-on approach and better structure, but it addresses the particular issue of how to deal with time away from the computer most effectively, by removing time away as a barrier.
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