Your emotions directly impact your trading results. Fear makes you exit too early. Greed makes you hold too long. Frustration leads to revenge trades. The first step to managing these emotions is tracking them. When you have data about your emotional patterns, you can start to change them.
Why Track Emotions?
Most traders focus entirely on the technical side of trading: charts, indicators, and strategies. But the psychological side is equally important, if not more so. Tracking emotions helps you:
- Identify patterns between emotional states and trading results
- Catch problematic emotions before they cause damage
- Build self-awareness that improves decision-making
- Develop healthier responses to market events
- Know when to step away from trading
The data speaks: Many traders discover through emotion tracking that a significant portion of their losses come from trades taken in specific emotional states. This insight alone can dramatically improve performance.
What Emotions to Track
Focus on tracking these key emotional states:
Before Trades
- Confidence level: How certain do you feel about this trade?
- Fear or anxiety: Are you worried about losing?
- Excitement: Are you overly eager to get in?
- Boredom: Are you trading just to have something to do?
- Overall mood: Calm, stressed, frustrated, or neutral?
During Trades
- Stress level: How tense are you while the trade is open?
- Urge to interfere: Do you want to move stops or take early profits?
- Focus: Can you concentrate on other things or are you fixated?
After Trades
- Reaction to outcome: How do you feel about the result?
- Desire to trade again: Do you want to immediately take another trade?
- Energy level: Do you feel drained or energized?
How to Track Emotions Effectively
Here is a practical system for emotion tracking:
Method 1: The 1-10 Scale
Before each trade, rate your emotional state on a scale of 1-10 for key emotions. Keep it simple:
Quick Emotion Check
- Fear: 3/10 (low)
- Confidence: 7/10 (good)
- Excitement: 4/10 (moderate)
- Overall: Calm and focused
Method 2: The Traffic Light System
Even simpler: rate your emotional state as green, yellow, or red:
- Green: Calm, focused, emotionally neutral
- Yellow: Slightly elevated emotions, proceed with caution
- Red: Strong emotions present, consider not trading
Method 3: Detailed Journal Entry
For deeper insight, write a brief narrative about your emotional state before and after each trading session. This takes more time but provides richer data.
Building an Emotional Trading Journal
Integrate emotion tracking into your existing trading journal. For each trade, record:
- Standard trade details (entry, exit, P&L)
- Pre-trade emotional state
- Any emotional events during the trade
- Post-trade emotional reaction
- Did you follow your rules? If not, was emotion a factor?
Analyzing Your Emotional Data
After tracking for a few weeks, look for patterns:
- Win rate by emotional state: Do you win more when calm?
- Loss patterns: Do big losses cluster with certain emotions?
- Rule-breaking triggers: Which emotions lead to rule violations?
- Time of day patterns: Are you more emotional at certain times?
- Recovery patterns: How quickly do you bounce back from losses?
Pattern Discovery Example
After tracking for two months, a trader discovered that 90% of his revenge trades happened within 30 minutes of a loss when his frustration was rated above 7/10. He created a rule: after any loss, wait 30 minutes before the next trade. His performance improved significantly.
Using Emotion Data to Set Trading Rules
Turn your emotional insights into concrete rules:
- Do not trade when emotional state is red
- Reduce position size by 50% when anxiety is above 6/10
- Take a 15-minute break after any loss
- Stop trading for the day after two losses in a row
- No trading on days when you start in a bad mood
Real-Time Emotional Check-Ins
Beyond tracking for analysis, do real-time check-ins during trading:
- Set a timer to check your emotional state every 30-60 minutes
- Before every trade, pause and assess how you feel
- After every trade, note your immediate emotional reaction
- If you notice elevated emotions, take a break
The pause habit: Simply pausing to notice your emotions before each trade can prevent many emotional trading mistakes. This moment of self-awareness creates space for better decisions.
Track Emotions Alongside Your Trades
Pro Trader Dashboard lets you log your emotional state with each trade. See correlations between your mood and your results to identify patterns and improve performance.
Summary
Tracking your trading emotions is one of the most valuable practices you can adopt. Use simple systems like the 1-10 scale or traffic light method to rate your emotional state. Integrate this tracking into your trading journal. Analyze the data to find patterns between emotions and results. Then create rules that protect you from trading in harmful emotional states. The self-awareness you develop will improve every aspect of your trading.
Ready to learn more about managing emotions? Check out our guides on trading with emotions and how to stay calm while trading.