The most dangerous way to blow your trading account is if you adopt this very bad habit – Impulse Trading. This is where trades are executed based on emotions or gut feelings rather than through a proven system.  As a result you experience potentially big losses and your trading confidence can take a big knock.

Stop impulse trading from happening with these five tips.

Tip #1: Take a Breather

When the itch to trade on a whim strikes, this is where you know you need to pause and take a step back.

Close your computer, go to the fridge and grab a beer. Or go play with the kids or furbabies!

A solid approach is to give yourself an hour before you make any more trade decisions.

If you stay in front of your computer, the desire to trade will overcome common sense.

So, remove yourself from the temptation.

Tip #2: Keep Your Eyes on the Prize

It’s a mantra of mine…

Trading is a marathon, not a sprint.

You need to maintain a clear, specific long-term objective.

And if you feel the need to take an impulse trade, go back to your proven trading stats.

Go and reflect on your trading history, journal insights, and proven strategies.

Remember, trading success isn’t about a single transaction but the accumulation of trades over time.

The market will always be there… So, keep to your discipline and wait for the high probability trades to line up.

Tip #3: Consult Your Journal

Your journal is your blueprint.

Revisit your journal to see the big picture. Examine your historical trades and their outcomes. Identify patterns of success and the failures.

This exercise is often enough to prevent taking any impulsive trade desires.

Tip #4: Dive into Trading Psychology

The psychological aspect of trading cannot be overstated.

You need to divorce yourself from any impulsive behaviours and emotions.

A proven strategy usually works thanks to patience and persistence and does not take any emotion into account.

Work on your psychology, read trading books, articles, watch YouTube tutorials or just save this article.

I can almost guarantee…

If you read this article, when you feel like taking an impulse trade – You will stop that chain of thought.

Tip #5: Limit Trading Volume

Sometimes you may impulse trade because you’ve just lost money on a trade. Or you have a series of winning trades and you are on a roll, nothing can stop you…

One way you can stop impulse trading is if you set a limit on how many trades you’re prepared to take in a day.

Or you can set a maximum gain or loss that you made or lost in a day, and that you have to stop trading afterwards. If you’re able to employ these strategies, you’ll find it very easy to navigate away from the dangers of impulse trading.