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How to manage your crypto trading stress


“Frederick was up () in February and approached his profitability in a relaxed way. When he went up () by the end of June, he raised his target ().

But soon he became too attached to the result and too uptight. He subsequently was flat starting in July and was taken out of his game by family and medical problems.

He started thinking emotionally and trading like an amateur.

As months went by, he became reluctant to cut his positions for fear that they would move after he got out, which had happened to him before…Sellers remorse paralyzed him, preventing him from cutting his losses and forcing him to frantically trade ideas he really didn’t know, leading to additional losses.”

-Ari Kiev. Mastering Trading Stress: Strategies for Mastering Performance



Trading stress has many sources and some surprising physical and mental reactions. You may recognize the symptoms from some pharmaceutical ads you’ve heard.

Like when you happen to have the TV on while trading, you hear an ad describing the symptoms of a heart attack. And after hearing it a few times you may actually laugh in sympathetic recognition.

Of course, the first time you heard it probably made you stop and think for a second…

After all, you’ve probably felt some of the things they are describing, repeatedly, every time one of your crypto trades unexpectedly dove into the abyss.

Your breathing probably became short and shallow.

Your eyesight narrowed.

Your heart felt like it was pounding out of your chest.

Your mind went blank.

And that sick feeling…

Now, heart attacks are no laughing matter, but neither is being intensely stressed when important trading decisions need to be made.

Everyone knows that trading is stressful, but few know how to deal with stress when it’s occurring. Because it’s not a matter of if you will feel stress. It’s when.

So where does the stress come from and how do you deal with it?


Hold the paddles

When a market is calm and everything is easy going, stepping away is no big deal. Surprises are at a minimum. You are calm and relaxed, maybe even a bit sleepy.

Chaotic markets, however, will find you hyper-alert and your whole system pinning the needle.

And it’s these moments that can have an adverse impact on your decision making, your health and of course, your profitability.

Now there are several circumstances that can create stress. Some of these are beyond your control like these chaotic and volatile market conditions. Or a personal matter.

Others are within your control like position size, planning out your trades and having some trading rules to lean on.

It’s always more fun to fly by the seat of your pants. But then suddenly (dun dun dun…) the position moves against you faster than expected and the internal alarm bells start going off.

Whatever the source of your stress, it needs to be managed effectively to make good trading decisions. Because the market doesn’t care how stressed you are or how you feel.

In fact, it’s probably “out to get you” because you are stressed and unprepared.

Do not fret. There are some things you can do to assist yourself stressed out trading self.

Let me explain.

Stress your Z’s

First and foremost, the focus should be on your health and one that includes rest.

This cannot be overstated.

Stress is a lot easier to manage when you are well rested. Rest is an important component of every performer’s regimen. Professional athletes have sleep coaches, it’s so fundamental.

There’s a story about how Carl Icahn sleeps in the middle part of the day and has all his negotiations in the afternoon. That way, he comes to a negotiation well rested while his adversaries are tired after a full day of work. This gives him the advantage.

This is the kind of advantage a trader needs when negotiating the crypto market.

Stress your pie hole

Nobody likes to diet (or even the word diet). It’s like swearing. But your biology requires that you give this some thought.

In order to function under stressful conditions, you should have a nutrition strategy. After all, your body will be mostly sedentary during each of your chosen trading sessions, but your body will be responding to market stressors.

Eating strategies involving high doses of sugar and carbohydrates are going to exacerbate any stress you might feel. The rush of sugar in and in response to the quick exit of sugar on the way down is the equivalent of adding a stressor.

It doesn’t work well for esports athletes, and it probably isn’t going to work for you.

You shouldn’t have to stuff your face with chocolate kisses, cinnamon hearts, or those mini chocolate bars left over from Halloween to get through the trading session.

What you want is a nutrition strategy that keeps your blood sugar more stable. That way, you can remove this unnecessary stress and distraction.

A nutrition strategy should also take into account the impacts of drinking alcohol. If you drink, this can impact the quality of your sleep, and create unnecessary stress and anxiety the next day.

Besides, what was the last good decision you made when you were hungover?

Stress some variability

Stress can also be managed with various forms of exercise. The one challenge is the choice between high and low-intensity activities.

If you are in a challenging market period, your body is already heavily stressed so a lower intensity approach will likely be beneficial.

Aerobic activity with a low heart rate will allow your body to recover from a tough session and set you up for the next day.

In other periods, a higher intensity approach can keep you sharp without taking away valuable energy for the trading session ahead.

You can use a tool like a heart rate monitor to help you get the ranges dialled. You can also use a tool like Heart Rate Variability (HRV). HRV measures your anatomic nervous system, which is a way of measuring whether you are rested or stressed.

Your nervous system can either be rested and relaxed or in fight or flight mode. Knowing this before you train can help you determine what strategy might work best that day.

View your sleep, exercise and nutrition strategy as preparation for your trading sessions.

Unexpected life events

Now one external stressor that you won’t have a lot of control over is life events.

A breakup with a significant other can skew your emotional responses. It will have an impact on your interpretation of market activity and analysis, and often not in a good way.

The death of a family member, friend or mentor can also change your perception of market conditions in a negative way.

There may be other challenges, including legal and financial matters, that can add stress and alter your normal functioning.

Here the rule is to scale back risk and activity until you can process. By watching your thinking through comments in your trading journal, you can get a sense of what’s going on and when you are ready to resume normal activity levels.

You are already stressed, so don’t push it. Deal with the problem and get back to form when you have.

What a turtle can tell you

Being able to observe your behaviour during a trading session can tell you a lot.

For example, if you find yourself hunched over watching the screen in a sort of fetal position, or like a turtle, that should tell you something.

You have a position on in the market, it’s likely big and/or pretty important.

This turtle position is what you probably do when you have a stomach ache. And you know when you have a stomach ache it’s hard to focus on anything else.

Your physical behaviour, in this case, is a demonstration of stress.

So is your position too large? Or is your analysis still intact? Are you following your trading plan?

If the answers are no, yes, yes, then you need to find a way to step away for a moment.

Here the solution might be to get up and walk around. Maybe splash some water on your face. Get away from the screen to help you reset. Get the blood moving around your body so you can come back and see it differently.

If you have a problem with your trading plan or don’t have one, then it’s time to refer to your trading rules for guidance.

Bad breath

There are times when your breathing can provide a signal that you are experiencing a stressful situation. And sometimes the solution is relatively simple.

For example, if you feel your stress is up and you might be bordering on anxiety, check your breathing.

Are you breathing into your gut and diaphragm?

Or are you chest breathing?

Gut breathing is slow, deep and relaxed.

Chest breathing is short and shallow, and it’s a response to a fight or flight situation. Chest breathing sets off a cascade of reactions in your body.

Your eyesight narrows.

Cortisol flows.

You start to sweat.

And you may find yourself feeling hyperactive and easily frightened.

This feeling out on the playing field can be useful. Sitting in a chair watching your crypto positions on the other hand, provides no outlet.

Getting control of the situation requires you to shift your breathing from your chest to your diaphragm.

Breath deep and push the air into your stomach area. Keep doing this deliberately and let your body reset. Your body will move from fight or flight to rest and relaxed. The chemicals will clear.

Your sight will expand from truncated, your heart rate will settle and you will be able to function better.

The market is an exam

You will also experience stress related to your market activities. Some of these like the size of your position will be within your control. Others like market volatility and sudden unexpected news will not.

One way to manage trading stress during your chosen session is to use your trading journal to sketch out what you plan to do.

If you think about the last test you wrote for some course, you might notice something interesting. If you were well prepared, there was some stress, but probably not too much.

Now if you were unprepared, or knew you should have done more, what did that feel like?

Probably not too good.

Now imagine there was money on the line…

By making decisions about your actions before your trading session, you relieve the stress of the unknown and the anxiety of feeling like things are out of control.

It’s like preparing for that exam. More preparation means fewer surprises and anxiety.

Neediness is a silent killer

Another source of stress can be attributed to a deeply unpleasant emotional attribute known as neediness.

Neediness is a major weakness in any negotiation and a borderline lethal way to make trading decisions.

You need to get this price.

You need to make this money.

You need to make it back.

You need a win.

You need this to work out…

If any of these sound familiar, you are vulnerable to unnecessary stress and lousy trading decisions.

To relieve stress in this situation, banish the word “need” from your trading vocabulary.

Every trade is simply information. You don’t need an outcome. What you will do is follow your trading plan and execute it. Then take the information and evaluate it.

Sacrifices to the trading gods

Now in spite of all your efforts, market conditions can become extreme. Things can suddenly get crazy without warning.

This is where your trading rules can help you. You see, trading rules and principles are designed to help you in stressful situations.

If for example, you have a significant position on, and volatility suddenly increases, you will likely feel some stress. These violent moves are typical in Bitcoin.

Now let’s say your trading plan has taken into account the possible trading range and your stop loss point remains intact. But you are feeling more stressed than you expected.

To reduce the stress, make a sacrifice to the trading gods and sell a little. Just a little. You can add it back later as the market figures out what it wants to do.

Now, you may also have on a multi-day swing trade on with a well-established plan and limits. Here you may, for some reason, start to feel anxious. Something may be bothering you.

You may not be able to sleep at night you are so stressed about your position. In this case you can sell your position down to what Livermore called the sleeping point.

There’s no need to sell it all if your trading thesis remains intact. However, you may need to relieve yourself of some stress that could interfere with future decisions related to the position.

The halve position

Sometimes the market looks like it’s leaving you behind. BTC takes off without you.

Your reaction? Maybe you “knew” it was going to go. Or you knew that was the low.

But the problem is you didn’t put on the position.

Then it goes higher and higher…and you wait thinking it will come back, but it never does.

Now, you can continue to sit there do nothing and allow the stress, disappointment and regret to build.

But here’s what is going to happen next.

Instead of analyzing the situation and making a plan and executing it, you are probably going to succumb to stress and emotion.

Because you HAVE to do something, right? You NEED to?

And if you wait long enough, you might find yourself seeking relief with a nice fat buy at what turns out to be the top.

That’s when needing to have a position can halve your account.

Now, remember, someone has to buy the top and sell the bottom, but that doesn’t have to be you. So if the pressure becomes too much, make a very small buy just to make sure you have something on.

That one action will reduce the emotional pressure and stress enough for you to think clearly and reevaluate the situation.

Preparation S

Remember, Bitcoin isn’t going to disappear. There will be lots of chances to make some cash if you stay liquid, solvent and rational.

Life is filled with stress of one kind or another. Especially when it comes to money.

As a market performer, taking steps to manage stress with tools within your control is great preparation.

Using sleep, nutrition and training in conjunction with a trading plan sets you up for success.

It also makes you far more emotionally durable in adverse market conditions beyond your control.

Using these stress management techniques also has one significant additional benefit. Many of them can be used in other aspects of your life outside of the crypto market.


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