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Traders, P&L And Emotional Well-Being

Traders, which can also include bankers, financial planners and wealth managers, all fall into the category of those with high pressure jobs.

Not only do they have to be incredibly competitive and aware of the markets, but they have to be on top of the opportunities that may present themselves in a split second.

In terms of traders, the P&L,  PNL or P/L (profit and loss) statement is really an indicator of their professional success. After all, they are only as good as their last big "win" or a bad as their last mistake. When these wins can make investors rich and the losses can result in financial ruin, the pressure on these professionals is incredible to say the least.

To make matters worse, the trader himself or herself often reduce success as a professional to their own personal P&L rating or score. They see their comfort or their discomfort in risk taking as a personal triumph or a personal failure, and they may begn to find their ability to disconnect from this type of thinking seeping into their overall emotional health and well-being.

Unhealthy Responses

The biggest risk to a trader is not in discovering that their sense of self-worth, their decision making and their understanding of the market is all rolled into their P&L, but in failing to do anything about it.

After all, there are going to be times when there are factors in the market that are beyond understanding or the ability to foresee or foreshadow. In these types of situations, a loss is going to make anyone second guess their professionalism and their ability to move forward.

Unfortunately, some traders will react in an unhealthy way. This may include attempting to "make up" for the loss, similar to how a gambler losing at cards will keep wagering higher and higher amounts to get that one big win so he or she can feel good about themselves again.

This not only further ties up your emotional health with the markets, but it also creates a very serious issue if you have a run of trades that don't result in that huge profit.

Another unhealthy emotional response is to become angry at the markets. Some traders call this revenge trading. It often includes making trades or taking risks just to attempt to get even with the market that is seen as against the trader.

The opposite is also true. A big win on the market can inflate the trader's sense of invincibility, risking the chance of taking on the trades that are reckless and ill advised. It is as if the trader sees him or herself as infallible due to the profit and somehow immune from the risks of the same market.

The Healthy Response

When traders find their emotional health and well-being is impacted by the market and their P&L statement in a way that affects their personal relationships, their happiness, or their ability to respond appropriately to other emotional situations in life, seeking help from a counselor or therapists is essential.

The therapist can work with the trader to retain emotional balance and to find coping mechanisms for the ups and downs of the P&L statement in healthyFree Web Content, emotionally positive ways that build professional competence and confidence.

Source: Free Articles from ArticlesFactory.com

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