In 2025, global markets are expected to be shaken by extreme volatility driven by President Trump’s policy decisions, given tariff hikes, public threats to dismiss Fed Chair Powell, and unpredictable trade moves. Often called the “Trump effect,” US politics creates constant uncertainty, triggering fear-based reactions in trading.
Understanding how to stay focused during such turbulence is critical for success. Equally important is choosing the right broker, one that provides tools and support to help you stay disciplined in volatile times. Here’s how mastering trading psychology and partnering with XM can give you the edge.
The “Trump Effect”: A rollercoaster market
Since Trump’s re-election, financial markets have experienced unprecedented swings. Major instruments like gold, Bitcoin, and the S&P 500 reached all-time highs amid policy speculation.
On Liberation Day (April 2), Trump’s sweeping tariffs sent global markets tumbling before they staged a strong rebound. A few weeks later, rumours about firing Powell caused a sharp 0.8% drop, only to be followed by another rally. This pattern of policy-induced whiplash has created an environment where markets swing wildly within hours, a psychological test for even the most seasoned traders.
How market volatility impacts trader psychology
In volatile conditions, traders are often influenced by fear, stress, and emotional exhaustion. Sudden news or price swings can trigger panic, leading to rushed decisions like selling too early to avoid losses. Greed can have the opposite effect, causing traders to over-leverage in pursuit of bigger gains.
These emotional extremes often fuel overtrading, excessive risk-taking, or holding onto losing positions due to the false hope that markets will reverse. This is known as the disposition effect, and it’s a common trap that leads to poor outcomes.
The emotional cycle of trading
Trading is deeply psychological. Most traders pass through a familiar emotional cycle:
- It begins with optimism and excitement, building up to euphoria when trades go well.
- When markets turn, emotions shift to anxiety, denial, and eventually fear and desperation.
- This can lead to panic, capitulation, and even depression, where traders feel defeated.
However, those who reflect and learn often return to the market with renewed hope, improved discipline, and a more strategic mindset.
The importance of emotional discipline
Emotional trading leads to inconsistency and poor performance. A structured plan, clear risk management, and self-awareness help traders stay in control, especially during unstable market conditions. Recognising emotional patterns is key to building long-term resilience and success.
Stay in control and trade confidently with XM
In unpredictable markets, staying calm and focused is essential for success. This requires more than just technical skills; it demands the right mindset, continuous learning, and discipline.
1. Trade with information
XM equips traders with the tools and resources to stay in control. XM Live Education, conducted in Thai by expert instructors, helps you understand market movements, sentiment analysis, and news impacts.
Combined with technical and fundamental training, it builds the mental framework needed for disciplined trading. To complement this, XM AI provides real-time insights and updates, supporting smarter decisions under pressure.
2. Sticking strictly to the strategy plan
A clear trading strategy is critical for defining entry/exit points and risk tolerance. XM helps you execute your plan with fast, reliable order execution, no requotes or rejections, and a stable trading environment. This removes one of the biggest psychological stressors: execution doubt.
3. Mitigate risk
Diversification is another way to navigate volatility. XM offers access to 1,400+ financial instruments across global markets and a Copy Trading feature, allowing you to follow over 9,000 proven strategies from successful traders worldwide.
4. Practice makes perfect
Practice also builds confidence. XM’s demo accounts let you train in live market conditions without risking real capital. This invaluable experience helps you manage emotions like fear and excitement during real trades.
5. Reduction of loss
XM further supports you with welcome and deposit bonuses, boosting your trading equity so you can stay in the market longer. Whether you want to open larger positions or protect against overleveraging, these bonuses give you flexibility and breathing room.
Mastering trading isn’t just about charts; it’s about mastering your mindset. With XM’s education, tools, and trusted platform, you can trade with clarity and confidence. Trade your psychology as seriously as your strategy. XM helps you build discipline, emotions, and focus on long-term success, consistency, and control.
Stay disciplined. Stay informed. Stay in control with XM
Open an account today to seize the opportunity to celebrate success with award-winning services from leading institutions worldwide.
XM offers a choice of over 1,400 instruments and 10 feature-rich trading platforms, including the XM app for iOS and Android, as well as the popular MT4 and MT5 platforms. Join 15 million clients who trust XM, a multi-regulated, all-in-one, world-class broker.
Enjoy instant withdrawals and stay informed by following XM on Facebook, Instagram, and TikTok. Visit their website for more information.
*Risk warning: XM’s services involve a significant risk and can result in the loss of your invested capital. *T&Cs apply.
Press release
The story Navigating trading psychology amid the ‘US Politics Effect’ and market instability as seen on Thaiger News.
