Performance anxiety is common in all fields where performers care about the outcomes of their performance. Before a big game, baseball, football, and basketball players may experience performance anxiety. The actor or actress before the play starts; the trader facing a volatile market–all can find that their stress levels get in the way of their performance. Performance anxiety occurs when we become so focused on the outcomes of our performance that we no longer stay in the natural flow of performing. It happens to golfers, it happens in the bedroom, and it happens to many traders.
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I try to focus on a carefully calculated trading process. Most of the work involved with stock trading is performing daily PC scans, sifting through the results, and keeping watchlists up to date. Identifying the strongest sectors, and noting the strongest stocks in those sectors. The whole process revolves around identifying where the money flow is going. The other important part of the trading process is money management. The distribution of stock portfolio percentage losses and gains is what ultimately leads to performance. I have a ‘line in the sand’ initial stop loss rule that I borrowed from U.S. traders William O’Neil and Mark Minervini. Any stock that falls to 6 percent below the initial purchase price is immediately sold. Percentage loss and gain is more important than the actual portfolio dollar amount. Successful traders don’t count coin. Positive expectancy is the end result of faithfully continuing the correct process. Following these trading process rules reduces or even eliminates performance anxiety.