Have you ever made a purchase and then instantly regretted it? Wondered why you just spent that money on whatever it is that you purchased? It has happened to all of us, it is called “Buyers Regret” and it is something that everyone experiences. It is the feeling of regretting the fact that you just spent this money on something and it happens more often the more expensive than an item is.
This same feeling can happen to traders in the form of “traders Regret”, it works much the same way and can have potentially devastating effects on both a trader’s account and also the trader themself. This feeling comes simply by the fact that you are risking your own money when trading, each and every trade that you make is a potential loss and will potentially cost you that money, this can lead to a few different things.
First, let’s look at what sort of trades can often cause this, we all should have our strategy and trading plan in place if you stick to it, it is far more likely that you will not experience this very strong emotion. However, if you have been listening to others and placing trades based on something you have seen or heard then as soon as you make that trade, you may wonder why you have done it. The same feeling can happen when you decide to step out of the comfort zone of your training strategy, as soon as you place that trade, you know that you have moved away from your strategy and put your account in some additional risk.
The feeling can also come when you have done nothing wrong, this is more obvious for those that are risk-averse if you do not like risk, then placing any sort of trade which adds an element of risk will potentially cause traders regret, this feeling can actually make it far harder to place trades in the future as the feelings that you had can linger in the back of your mind for quite a while.
The problem with traders’ regret is the fear that it can cause, it can make it far harder to make additional trades, it can prevent you from wanting to have that feeling again and so you begin to miss great trading opportunities, even those that are fully in line with your strategy and trading plan. Sadly, sometimes traders’ regret can get the better of you, as soon as that trade is open, you get the feeling and close it for a small loss, the trade can then go on to win. The next trade, it’s the same feeling and so you close it again, this can continue for quite a while. Most people will look at that and think that you probably shouldn’t be trading, this is not the case, what is needed is for you to work out a way to get over this feeling.
So let’s think about ways that we can help to avoid this feeling or to at least reduce it once a trade has been opened. The first thing that you need to do is to set up a trading journal, this is something that you can use to write down every trade and every decision that you make. This is perfect for reviewing our trades, and can also be a deterrent for traders’ regret, mainly because when you are worried about something you can look back at your previous trades to see why they were taken which can give you more confidence in the ones you are now making.
Having a solid trading plan can also help, if you have done the analysis and it is fully in line with your strategy then there should not be anything to fear. Knowing that proper analysis has taken place and that it is your decision should help alleviate some of the anxiety once the trade has been opened. This is a far better way of managing your trades when compared to copying trades that others have suggested.
While it may not be a good way to reduce the anxiety, a way of avoiding the potential of closing trades early is to simply input a stop loss and a take profit, place the trade and then walk away, leave the trading terminal, let it do its thing If you are not near the platform then you cannot close it, it will allow your strategy do what it was designed to do, after a while of doing this you will come to realise that your strategy is working, using itis giving you overall good trades, so it will help to alleviate some of the anxieties around placing trades.
Traders’ regret is a big thing, it can be very damaging, doing what you want to alleviate the feeling is important, it can take time, a lot of time, but the more confident you are with your strategy and trading plan, the easier it will be to avoid this very strong feeling of regret. In the end, you need to try and ignore the feeling and just make that trade.