How to Manage Emotions in Future & Option Trading: A Practical Approach

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Dealing with Future & Option trading requires a good understanding of the market, a practical approach, and excellent decision-making capabilities. It involves constant purchasing and selling of shares. Thus, an individual’s mental state plays a crucial role while trading. An important lesson every trader needs to follow is; to avoid trading under emotions. Emotionally stable and calm people tend to make more profits in trading. In this article, we will learn about the impact of emotional trading and ways to control it.

Impact of Emotional Trading in Future and Options

Trading is known to keep investors on their toes. It generates various feelings in an individual. These include fear, excitement, greed, conviction, nervousness, etc. Let us understand the effect of these emotions on trading. 

  • Enhances the quantum of risk: Securities trading itself is a risky business. While doing Future & Option trading, you have to calculate many systematic and unsystematic risks. To make the right decision, a trader has to consider the company’s policies, business models, quarterly results, future prospects, etc. Many times, trading under emotion results in a myopic approach. As a result, the trader tends to overlook one or more of these crucial trading aspects. This might result in adding weak stocks or losing on potential stocks.
  • Make you lose the path of goal-based investment: It’s crucial to have a goal to become a successful trader. It ensures that you have capital at the time of need. Emotions tend to cloud the trader’s judgment. As a result, a trader ends up running after short-term gains while missing the ultimate goal. Whereas an unemotional decision is more practical and logic-based. It helps you in achieving your wealth goals.
  • Enhance your overall trading experience: Stock markets are one of the most commonly used platforms to increase capital; although there is a lot of risk in the stock market. Perseverance and commitment are two of the most important attributes to stay in the market for a long time. It is also said that a bad trading decision makes people lose their interest in option trading. Whereas a practical and fact-based approach helps you make the right decision, that further results in generating more profit.

Tips and Strategies to Help Control Emotions During F&O Trading

There is no specific rule to generate profit in F&O trading. Several external factors control the growth of a stock. Thus, keeping yourself calm and practical is very important. Having a financial goal and a systematic approach to achieving that goal can be your key to success. Today, we have numerous financial tools like PPF Calculator to help us set a practical target. Let us learn some tactics to prevent our emotions from getting in the way of enhancing our wealth.

  • Lay some rules: One of the easiest ways to control emotions is to lay down some trade-related rules. Some of these rules include exit/entry trade amount, stop loss, profit margins, setting risk levels, etc.
  • Shut-off market noise: Stock trading is a very active platform. Whether the market is running towards a bullish or bearish trend, you tend to hear a lot of buzz. These news, stories, comments, etc., hampers our emotional stability. Thus to keep your emotions under check, you should filter such noises.
  • Logic-based approach: Fact and logic-based decisions keep emotions at bay. Such decisions are more practical and rational. Before making any trade-related decision, considering the facts, figures, and fundamentals is crucial. It will help you to take the best and most profitable trading option.
  • Limit your trade size: Another easy way to handle your emotions is by keeping a lower F&O trading size. The more capital, the higher will be the risk: and the more will be fear/greed.
  • Relax: You tend to make more rational decisions with a relaxed mind. So, be calm and enjoy the trading experience rather than stressing.


Emotions are an inseparable part of human personality. However, to be successful in F&O trading, having a practical approach is crucial. Make  sure to follow the tips and strategies mentioned above to win at future and options trading.