Tilt in trading: what are the dangers of this condition and how to overcome it
Emotions have a much greater impact on trading success than it might seem at first glance.
Their influence is simply enormous; it is under emotional influence that traders make grave mistakes that lead to losses or even the loss of their deposit.
It is generally accepted that the most successful traders are those who can manage their emotions, do not panic, and do not make rash trades in a state of euphoria.
Lack of calm and focus in trading is often referred to as tilt trading, and it is believed that professional investors are best advised to avoid such states.
Tilt is understood as any deviation from emotional stability, no matter in which direction it occurs; both negative and positive emotions are equally dangerous.
Traditionally, we will try to understand the concept of this term using specific examples.
Positive tilt in trading
You open a buy trade after good news appears, the price begins to rise rapidly, after a certain time you receive the planned profit and close your position.
After this, the price continues to rise, and being on an emotional high, you open another buy trade, and with a larger volume than the first one.
But the trend has already exhausted its potential and a gradual price decline begins. You still believe in luck and continue to hold your position. Ultimately, the losses on the second order exceed the profit on the first.
This means that no matter how successful your previous trades were, try to re-evaluate the market situation before placing your next order.
Negative tilt in trading
Negative tilt, which occurs in trading, is even simpler. Someone who has already made several mistakes is generally prone to repeating them.
To trade successfully, you must first emerge from emotional depression, analyze the reasons for the mistakes you made, and only then proceed with further work.
Under no circumstances should you try to recoup losses from unsuccessful trades, especially by increasing the volume; this approach rarely ends successfully.
Tilt in trading most often occurs in inexperienced traders. It's no wonder that most recommendations for beginners advise trading on a demo or cent account for as long as possible. This will allow you to learn to manage your emotions without financial losses.
In conclusion, I would like to note that female traders are generally less susceptible to tilt in trading than male traders; they are more cautious and almost always make informed decisions.
