While online trading offers significant financial rewards, it comes with its fair share of emotional and mental pressure.

In fact, a recent study found that academics who trade cryptocurrency experience lower quality of life, worse sleep, and higher stress levels compared to their non-trading peers.

This stress, particularly during periods of intense market volatility, can push traders to make impulsive decisions that may jeopardise their long-term success.

As October marks Mental Health Awareness Month in South Africa, Roger Eskinazi, Managing Partner at Tickmill, believes it is the perfect time to address the importance of mental resilience in the trading community.

“Emotional trading, where choices are driven by feelings rather than logic, is a common result of unmanaged stress.

This behaviour can cause traders to deviate from their investment objectives, buy or sell based on fear, and ultimately damage their portfolio.”

By understanding how stress can influence trading decisions, traders can take proactive steps to get a handle on their anxiety and build greater mental resilience.

Eskinazi offers the following practical tips to help manage stress as an online trader:

Maintain a healthy work-life balance

Trading can become all-consuming if not properly managed. The nature of online markets, which operate globally and often beyond standard working hours, can result in traders spending endless hours monitoring their portfolios. This lack of balance – and sleep - can increase stress levels and have a detrimental impact on one’s mental health.

To ensure this doesn’t happen, Eskinazi says that setting boundaries between work and personal life is crucial. “Allocate specific times for trading and ensure you take breaks to recharge.

Maintaining a healthy lifestyle, including regular exercise, meals, and proper sleep can significantly reduce stress and improve decision-making abilities.”

Stick to your trading plan

A well-thought-out plan is a trader’s best defence against emotional decision-making. It outlines clear objectives, risk tolerance, and strategies for entering and exiting trades.

When stress levels rise during market fluctuations, sticking to this plan prevents knee-jerk reactions that could lead to costly mistakes.

“Having a solid trading plan in place provides a sense of structure and helps mitigate the effects of market uncertainty,” says Eskinazi. “But having total trust in this plan is key, even – and especially - when the market becomes unpredictable.”

Join a trading community or forum

Trading can be an isolating activity, especially for independent traders. Joining a trading community or forum can offer support, shared experiences, and valuable insights.

Being part of a community also allows traders to learn from each other, gain new perspectives, and share their challenges. This sense of connection can help reduce stress by offering support, not only professionally but also emotional and mental support.

Focus on what you can control

One of the biggest stressors in trading is the inability to control market movements and traders often feel anxiety over factors beyond their control.

Rather than dwell on this uncertainty, Eskinazi urges traders to focus on elements within their control. “This means sticking to your plan, managing your risk, and maintaining discipline.

By concentrating on controllable factors, you can reduce the psychological strain caused by unpredictable market swings,” he concludes.