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Trading Psychology

8 Strategies To Keep Your Emotions In Check In 2024

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Written by Timothy Sykes
Updated 1/3/2024 5 min read

While the overall market has started off shaky…

We’ve seen plenty of opportunities in penny stocks.

In fact, I’m off to a solid start to the year.

That said, I don’t expect things to be easy this year. I wouldn’t be surprised if we start seeing even crazier moves than we did last year.

And while I do believe there will be incredible opportunities to make money. The only way you’ll be able to do it is by keeping your emotions in check.

One bad mistake early in the new year can cripple you for several months.

To help you avoid that, I’ve put together a list of 8 strategies to keep your emotions in check.


#1: Recognize the Emotional Danger

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In trading, letting emotions rule is like adding fuel to the fire.

Remember, sometimes the best move is cutting a loss.

It’s about being disciplined enough to accept small losses instead of letting them snowball into disasters.

#2: Cultivate Mechanical Discipline

I’ve always said, ‘Be mechanical.’

This isn’t just about what stocks to pick… it’s about developing a process that becomes second nature.

Don’t let emotions cloud your strategy. Stick to your plan, even if it means missing out on potential gains.

#3: Stay Aware of Your Mental State

Your mental state directly influences your trading decisions. Recognize when you’re feeling burnt out, hesitant, or overly aggressive.

Being self-aware helps you make more calculated decisions and avoid emotional traps.

#4: Simplify Your Trading

Overcomplicating trading can lead to emotional decisions.

Keep it simple – focus on a few key strategies that work for you. This helps in reducing decision fatigue and emotional stress.

#5: Embrace Positive Thinking

Staying positive is crucial. Ditch the negativity and self-doubt. Embrace each trading step as progress, no matter how small.

Remember, a positive mindset leads to positive trading outcomes.

#6:  Learn from Every Loss

Each loss is a lesson in disguise. Instead of letting them get you down, use them to sharpen your strategies.

This approach helps you stay emotionally grounded and focused on improvement.


#7: Control Overtrading Tendencies

Overtrading is a common emotional response. I’ve structured my life to avoid this pitfall by traveling and immersing myself in charity work.

Find activities that distract you from the urge to overtrade.

#8: Trade Like a ‘Retired Trader’

Think of yourself as a retired trader who only comes back for exceptional trades. This mindset helps in staying disciplined and not getting swayed by emotions to make unnecessary trades.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”