Happy Friday, traders…
Jeff here.
After so many years of teaching students about the stock market, I’ve noticed one emotion that ruins traders more than any other — stress.
And after the recent market turmoil, we might all feel a little stressed…
Stress can affect both your mental and physical well-being. And heightened levels of stress can even lower your overall quality of life…
It can affect your sleep, appetite, relationships, and overall mood.
And let’s be honest, the stock market is not a naturally low-stress environment.
This leads some traders to think they’re supposed to be stressed while trading, but this is a fallacy.
You’ve gotta learn how to deal with a manageable level of stress while continually looking for ways to reduce it.
With that in mind, let me show you three easy ways to combat trader stress…
Never Risk More Than You’re Willing to Lose
Before you make any deposit into your trading account, ask yourself: How would you feel if you lost 100% of that money?
We all want to grow the money. And if you study hard and apply yourself, that’ll probably happen for you.
But your first few trades could go south and take your hard-earned money with them. Even with stops, that’s the risk inherent in options trading.
And if this happens, you want to make sure you’re risking expendable income.
If losing your initial small-account capital would put a serious strain on your lifestyle, then you’re trading with way too much size.
You need to be able to cover your basic expenses without worrying about individual trade outcomes.
But there’s another, even more important reason to consider this as well…
If the money you’re risking is essential for you to live, you won’t make the best decisions.
You’ll be too emotionally attached to the money, which leads to incorrect, irrational, knee-jerk reactions when trading.
Contrarily, if you can find the perfect account and position sizes — that give you slack to make decent money but don’t make your stomach churn every time a dip occurs — you too can become an unstoppable trader.
Don’t Rely on Trading for Income
Students often ask me, “Should I quit my day job? Should I go into full-time trading?”
My answer is usually no. Because most people aren’t ready yet.
It’s always good to have a dependable job if you can, especially during the first few years…
Having a reliable stream of income (that’s unrelated to your trading performance) can actually help you be a better trader.
If trading is your only source of income, that puts a ton of pressure on your decision-making.
Unless you have a big savings reservoir, you’ll have to succeed in the markets at all times to put food on the table.
That’s too much pressure and stress if you need that money to live. You cannot trade like this.
Constant success in the markets is impossible and unrealistic. Don’t expect to win on every trade.
That said, if you know you’ve got money coming in from another job, you shouldn’t have to worry about losing your shirt in the stock market…
This takes the pressure off of your trading performance, allowing you to focus on your long-term process (as opposed to your near-term profits)…
Minimize Your Weekend Exposure
A lot of trader stress comes down to holding positions too long.
If you hold super-risky positions overnight — especially in a choppy market — you’re going to be more stressed outside of active trading hours.
This is one of the main reasons I love Flat Fridays, where I usually close my positions out before the close — because anything could happen over the weekend.
In this tape, where volatility is quietly creeping up, the overall price action can shift on a dime…
Now is the time to shrink the game — tighter stops, shorter holding times, smaller position sizes, and more discerning trade selection.
Take these three steps and I bet you’ll be less stressed.
Happy trading,
Jeff Zananiri
P.S. The best traders I know don’t stop working over the weekend…
TOMORROW, January 11 at 12:00 p.m. EST, the great Danny Phee is hosting a SPECIAL LIVE WORKSHOP to show you how to start weaponizing my AI-powered GAMMA Code system for huge overnight gains.
Seats are filling up quickly — Don’t miss your chance to join.
*Past performance does not indicate future results
