As traders, we’ve all experienced a memorably bad day when nothing seemed to go right. In fact, it may have seemed as though every decision we made could not have been more wrong, even if we had a crystal ball to help us screw up: buying every top, getting short at every bottom — that kind of day. But we’ve also had days when everything seemed to go right – when entries and exits were achieved with the precision and practised effortlessness of an Astaire-Rogers duet. What a world of difference!


What might account for the difference? One factor – a very important one – is a trader’s state of mind, which at its most effective is attentive yet relaxed. Achieving this mental state is often more easily said than done. By its very nature, trading is stressful. So how do we achieve a state of relaxation conducive to profitable decision-making? One answer is to take advantage of opportunities when they arise. 

For example, take partial profits on winning trades. Ideally, this should be done early in the trade, so that the psychological benefits are available for as long as the remainder of the position is held. Even if you are shooting for big profits on a swing trade, it will work wonders for cultivating a calm and relaxed mental state if you take just a small partial profit early on. At that point, you’ll be playing with the house’s money, with better odds of exiting the trade with a profit, or with no worse than a scratch, even if it should turn precipitously against you.

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