Have you ever put on a trade while under tremendous strain and discovered that you were unable to function normally? Your trading strategy came into doubt, and suddenly, you paused when you should have taken immediate action throughout the trade. It could be difficult to recover when you’re in this state. It is greatly influenced by one’s mood. You’ll feel paralysed and stuck when you’re unhappy. Determination is influenced by your mood. You’ll trade more sincerely if you’re feeling better.
The psychologists Benie MacDonald and Graham Davey shown in a ground-breaking experiment that striving for excessive perfection is a function of two factors: a negative mood and the conviction that mistakes have serious repercussions. Students in college were given a task that required them to find 100 spelling and punctuation problems. A participant was placed into one of four experimental groups at random. Some participants were warned that making a mistake on the task would result in a mild form of punishment, while making a mistake had no repercussions for other individuals. While some participants completed the activity in a positive mood, others completed it in a negative mood that the researchers artificially produced.
Participants who were unhappy or worried that they would be punished for making a mistake had a tendency to check and verify their work excessively. In other words, they made an effort to attain an impossible standard of perfection. Why did this particular group of individuals strive so desperately for unattainable perfection? These participants, according to MacDonald and Davey, let their feelings control how they acted. They reasoned, “I’ll keep looking for errors until I’m pleased.” This isn’t a very effective tactic, though, when you’re feeling down. If you check and recheck your work until you are satisfied, you will check and recheck longer than is necessary because a negative mood doesn’t leave you very quickly.
This experiment explains why, while feeling down, people gravitate toward high perfectionism. If you are prone to self-doubt, being unhappy will make it harder for you to feel confident. You’ll doubt the viability of your trading strategy and whether the market conditions are ideal as you try to put it into action. You’ll never be content and feel as though something is off. One of two things must be done at this moment. Either avoid trading while you’re feeling down, or don’t let your feelings control what you do.
Remind yourself that you will be more likely to second-guess your choices and act irrationally or impulsively when you’re feeling down. It is feasible to get around the psychological processes that affect your decision-making if you are aware of them. You can try to ignore your mood and firmly and logically try to implement your trading strategy with discipline if you believe, “I’m in a terrible mood, so as a result, I’m irrationally questioning my trading plan or my talents.” Whatever course of action you choose, keep in mind how strongly your mood affects your ideas and choices.