Dealing your emotions is a hard goal to achieve. And the worst part is that it can hit us no matter if we’re losing or winning.
Probably, you never thought you could be trapped by the winning emotions. But let me tell you they can be as terrifying as the losing feelings… Just imagine the following situation: you enter in a trade and you make some nice profits. The result is that you feel pleased, satisfied, happy. So, this makes you be more confident, which is a good thing, if you preserve your discipline. But this is where things start to go wrong, especially if you’re in a winning strike. What happens is that you become over-confident and start putting more money per trade; you start by not following your system properly; you start to ignore the stops and targets defined… In sum, you’re facing a lack of discipline.
As you know, you won’t have just profits; you’ll also have losses. And when the winning strike is over, if you follow the above pattern, you’ll lose severely because you’re trading too much money per trade and ignoring all your system rules…
Now, if you think about the losing emotions, like being unmotivated, unsatisfied, sad. In this case, most traders who lose money in a single trade are affected by them. And what most of them think is that they need to recover the loss. And they make a trade, based on emotions, with more money involved, not following the system… In sum, lose all the discipline.
And the result is basically the same: you’ll end up losing a lot of money because you just couldn’t avoid trading guided by your own emotions…
Hope, anger, pride, sorrow, shock, feeling guilty, or enthusiasm – these are just some of the feelings you can experiment when you’re trading Forex. However, the biggest “giants” are greed and fear. In combination, they stand in the background of most problems that may happen to a trader:
• Fear of placing a trade;
• Hesitation and uncertainty;
• Open too big positions for too small accounts;
• Trading too small;
• Closing the trade early;
• Not closing the trade;
• Let profits turn into losses;
• Among many others.
The only thing you need to be aware of is that you cannot fight against the Forex market. Please remember: the market is always right.
Dealing with emotions is not an easy process but is a crucial one if you want to succeed in this market. Even professional traders sometimes have problems; you’re not the only one… The best thing to do is to keep practicing, keep a trading diary and keep the discipline.
i agree with this article because i’m a pro trader but before become professional i had to fight with my emotions a lot of times and blow away my account 3 times…then i decided to always follow my plan and strategy to keep stop loss and take profit at the same point from when i gave an order and never never never change it..of course after 3 years experience i can recognize quickly if the trade will be profitable or not so i don’t wait the stop-loss to hit..but when i follow my strategy with exactly enter take profit and stop-loss i became profitable more than 1000 pips a month…but only when i trade with plan and keep it..when i trade with emotions and what i believe and don’t see what the market tells me i always losing money…so stick to a plan and follow it..this is my advise..
I totally agree with you loucas, following a trading plan matters alot but remember, you must not always be right at least trying to cut the wrong part of it is the best. Thanks for this topic and keep it up, this site has been truely helpful.
Best regards.
loucas:
I’m glad to hear that you managed to pass beyond trading based on emotions. Having a plan and sticking with it is more easy to say than to be done. But since now you’re already seeing the positive results, you know that’s the way you need to go.
Good Luck.
Ifekezfx:
Thank you for your kind words.
Good Luck on your trading.
Totally agreed with the article and loucas. In every trade you can’t win and similary in every trade you can’t lose. Wait for the best opportunity, by avoiding maximum threat, which can be available easily many times a day. Take the advantage of that opportunity. One last very important thing: never follow revenge strategy, always remain in limites. That usually comes from experience.
Good Luck !!!
Great advice Farhan.
Good Luck!