Self-awareness is about recognizing your own emotions, thoughts, and reactions. Emotional triggers, on the other hand, are external or internal stimuli that provoke an intense, often involuntary, emotional response.
Developing better self-awareness allows you to identify these triggers, thus reducing errors in judgment by enabling you to anticipate and better manage them.
It is important to take a step back to identify emotional triggers that could harm your performance or decision-making. Here are some examples of common situations that can easily unsettle you:
Taking three consecutive losing trades
Having a poor night's sleep
Still recovering from last night's epic party
Failing to execute a trade properly
Watching a stock surge after taking a loss
Missing a promising investment opportunity
Having an argument with your spouse
By becoming aware of these triggers, you will be better equipped to manage them, and as a result, improve your decision-making and outcomes.
It is essential to understand that emotions, if not controlled, can affect your judgment, but with good self-awareness, you can limit their impact!
Source:
Pat Bailouni. Trading Psychology. YouTube, September 2024.
Image credit:
Depositphotos
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