Every Trader Needs to Combat Decision Fatigue
Trading tools can reduce decision-making fatigue and make you a better trader.
Traders make numerous decisions every day that involve their emotional, financial, and physical well-being. After a long session of decision making the ability to make good decisions deteriorates resulting in decision fatigue.
Emotions Play a Role
The two most common emotions that you as a trader experiences are greed and fear.
- Greed is an intense desire for something, which impacts our mental state. In trading, this desire is to maximise profits and wealth. Instead of sticking to your original decision greed can influence you to change your mind. Typically this results in making poor decisions and eventually leads to decision fatigue.
- Fear is a distressing emotion aroused by impending danger, evil or pain, which impacts our mental state. Trades that go out of your favour, can trigger the fight or flight mode, which may result in making irrational decisions and can also lead to decision fatigue.
How to Combat Decision Fatigue
To combat decision fatigue we need to structure our decision-making process thereby reducing the number of decisions we make in a given day.
A trading plan, which defines your trading objectives, trading strategies, and trading rules, is important to ensure that your decision-making process is consistent and allows you to remain focused when making decisions. Following a system reduces trading pitfalls – making emotional decisions, overtrading, taking premature actions and constant decision making.
Decision fatigue is further reduced by automating rules to enter, manage and exit trades.
BAT-OE is a MetaTrader 4 and 5 expert adviser (EA) with an on chart trade panel for order execution. It automatically calculates risk and position size to reduce the number of decisions you need to make when entering a trade. Automated calculations allow you to focus on making decisions regarding where and when to enter the market.
The benefit of using a tool like BAT-OE is the ability to customise the EA to execute your trading plan. This means that you no longer need to spend time deciding how to manage and exit each trade. The EA features an automated trailing stop mechanism. All the thinking work is done for you according to your trading rule. This has a massive, positive impact on your trading performance!
Instead of having to rely on alerts that keep you pinned to your chart, automating your trading plan allows you to become a better trader by reducing the number of decisions you make and freeing up your time and attention.