I’m a stressed out investor!


A question got asked on Jason Kelly’s blog recently.

I’m new to investing, and having trouble dealing with market stress.

This is something we all deal with somewhere along the way. Jason’s first response that investing isn’t for everyone is fair, though I don’t think that’s what the questioner really wanted to hear. He hits on one thing that can help a bit later, though.

Education can go a long way toward reducing stress levels. The more you know, the more comfortable you’ll be playing the markets. I don’t mean you need to go out and read every book ever written or spend loads of money attending seminars and courses. Just focus on things specific to your situation, trading style, the market you’re in, etc.

And keep in mind that at a certain point it’s all about experience. At some stage you just have to get in there and trade.

That all said, some of the stress undoubtedly comes from the fear of losing money. A very simple way to settle those fears is to trade smaller. That’s generally a good idea for anyone new to the market in general – once one has gotten to the point where it’s time to make the jump from demo trading, that is.

One last thing worth mentioning is the fear of being wrong. I’ve seen that paralyze people, even in a demo trading account. Every trader has to get to the point where it’s not about right or wrong. It’s about doing the things that will make money, consistently. You can’t control the market, but you can control whether you follow your plan.

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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.

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  • JW

    I have been trading in various markets for almost 20 years and I must admit that after so many years, I still get stressed over the market constantly. However, the stress is less about the money than whether I got was able to get in at the correct entry and exit at right point. Over the years I learned that once you commit money to the market, it is no longer yours and your fate is tied to the market, which is mightier and stronger than any investor or so call market gurus. It’s matter of being right more than you are wrong and if you are wrong, being able to admit it and minimize losses. However, if you are right, you must have guts to ride out the market trend and maximize gains. This is area where I am still having problems. I tend to cover gains too quickly (especially if gains come after stint of losses) and lost more in opportunity costs from too quickly covered winning positions than all losing positions. So basically, you must have firm commitment in your decision on a position but if you are proven wrong, then be able to admit you are wrong and cover. However, market price fluctutation should not be sole cause to determine whether you are right or wrong. I am not sure if I got my point across but I am saying trade only when risk/reward is in your favor and know why you invested in order not to be shacken out by market volatility.

  • http://www.theessentialsoftrading.com John

    Great comment JW. You’re exactly right. I’ll admit to dealing with that sort of thing myself, especially in my short-term trading.