The online trading is an activity that definitely requires concentration and quiet to be carried out successfully. In fact, in addition to being important to have a strategy and stay up to date on the financial markets in which you will invest, it is equally important to avoid distractions at any cost.
Already, just the distractions: often only one is enough to send an entire operation calculated to the smallest detail. In doing so you lose your potential profits and cause you instead of a gain, a loss.
For this (important) reason, in this article we will analyze the various types of distraction that you absolutely must avoid while doing online trading. These are tips that will help both novice traders and perhaps those with more experience on their shoulders.
We divided the possible into distractions into four groups …
The easiest to describe and also to recognize; therefore the easiest to fight and eliminate. By environmental distractions we mean all those distractions that can capture your attention while you find yourself in front of the computer to do online CFD trading; when your attention should be completely dedicated to trading and not to anything else.
In this case the distractions are something very subjective: they vary from person to person, from trader to trader. Something that for a trader means distraction, can mean concentration for another trader.
For example, a distraction can be trading near a window: your attention is likely to be captured by street noise, people talking, ambient noise, and so on.
We still define as environmental distraction the fact that there is someone else around you in the same room (relatives, children, wife, husband, and so on); or have the television turned on in the background or music in the background or a light too strong. No matter the type of distraction, it only imports the fact that this distraction causes loss of concentration.
The solution is one and only one: Eliminate distraction
If you are bothered by the noise of a television or a stereo, simply switch off the appliance; if the light is too strong or you turn off the light or change the room. If the source of distraction comes from outside noise, close the windows or trade in a quieter room. If the distraction comes from someone else who “buzzes” around you while sitting at the computer, point out to the other person what you are doing and that you need peace of mind. In short, once you recognize the main source of distraction around you, take an appropriate solution.
In this group another kind of distraction ends up, much more “harmful” than the previous ones. We say damaging because these distractions can seriously alter the results of your operations also leading to significant losses.
By mechanical distractions we mean everything related to your computer: the same computer in which you are right now reading this article. The same computer you will need to do online trading on Forex, commodities, stocks, stock indices, ETFs or cryptocurrencies.
For example, we refer to the presence of a virus inside your computer; or the fact that it is a computer that is too “dated” and therefore slow, that often freezes or creates problems; or again, that there is some problem with the broker’s site or its trading platform.
Always ensure the safety of your computer using a good antivirus: this should be a golden rule regardless of the reason you use your computer. Also check that your connection is not too slow and does not cause connection problems: in case of internet slowdown you risk not being able to carry out your trading operations correctly.
Finally, always test the broker’s platform before starting to trade: you certainly do not want to choose a broker, make the deposit, and then once you connect to their platform you discover that it is unstable and unreliable!
Another topic that falls into this type of distractions is the “mobile trading”, or the trading carried out by smartphone or tablet.
Mobile trading is a thorny subject: there are traders who defend it by the sword, as well as traders who point it out as a waste of time and money. In this case, it all depends entirely on you: if you feel comfortable trading on your phone or tablet, it’s better for you. But normally, it is recommended to have a screen of sufficient size to analyze a graph in peace; moreover, if you rely too much on your phone, be careful of the battery level: if you download in the middle of an operation are trouble!
By market distractions we mean all those distractions from the financial markets in which you are investing. These include, for example, economic news, the release of economic data, geo political events, and conferences by bankers or figures linked to the world of finance.
As you well understood, we are talking about all those events that have the power to influence the market more or less strongly; even if it is normally “background noise”, or the price movement may vary slightly depending on the news received, but then go back to follow the main trend.
There is no shortcut in this case: someone could say not to follow financial news; instead, not recommended to do, since some of these financial news can really change the trend of a trend (imagine if at a press conference, the CEO of a bank proclaims bankruptcy: there will certainly be economic implications!).
You cannot rely solely on technical analysis, so we believe that the only possible way to avoid such distractions is … experience. Experience and common sense. By dint of trading and following the various markets, you will be able to more easily recognize the news that can really influence the price movement and which are only “background noises”.
Here we are finally at the kind of distractions that often turn out to be the most difficult not only to be recognized, but also to be defeated. We are talking about your emotions: the main enemy of every trader.
Emotions are not only a problem for novice traders, but also for more experienced traders: following emotions usually does not lead to anything good. For emotions we mean …
- The fear of losing one’s money;
- The greed of wanting to make more money;
- The impatience of not knowing how to wait for the right moment;
- The frustration after a wrong operation;
All emotions that can influence the mind of a trader and that can change his method of reasoning. Online trading is an activity with its own risk, which can be reduced and managed if you remain lucid, cold, and logical in making investment decisions.
To avoid falling prey to emotions it is recommended to have an investment strategy and a good knowledge of the markets, and always remain faithful to this strategy: after all the strategy will give us the signals to invest and this strategy has been elaborated in a moment of lucidity and rationality, without having negative emotions in our mind.
You must therefore remain as objective and isolated as possible from trading: only in this way will you be able to keep such emotions at bay. We strongly advise you to explore this topic which is often underestimated by many traders, and it happens to be one of the main causes of losses.
So, now we have the answer to the question: “How to avoid distractions while trading online?” To summarize …
- The first step you need to do is to identify your distractions.
- Once you are able to identify them, do everything you can to remove them.
- Make sure your computer has no problems and is always up to date, as well as your internet connection is stable.
- Find a place in the house where you can trade in total tranquility and silence.
- Minimize the distractions around us.
In this way you will take another step forward in making sure you are a profitable trader. The next step? Develop your own trading strategy or find one that fits your trading style; promising to always remain faithful to this strategy.