How to Trade Forex Without Emotions, Stick to it and it will help
Dec 19, 2012 at 10:30
Vistas 854
6 Replies
Miembro desde Sep 24, 2012
posts 26
Dec 19, 2012 at 10:30
If it can help me, then it can also help you, it is just a matter of sticking to it.
Emotions are the one of the greatest problems of being a Forex trader. Almost every beginning trader, who starts with the demo account, experiences a great success in his or her trading, but fails to carry this success to the real money account. The problem is letting emotions get in the way of rational judgments. When we lose, we feel frustration and sometimes even despair. Winning can cause us to lose control over our actions and turn trading into a gambling, or cause a serious over-trading problem. Calming greed and taming fear will help you to overcome trading Forex in an overly emotional way. Here are some suggestions to help you.
(1) Recognize the emotions involved:
Greed – human beings often want more! When market goes as we expected, it is too easy to believe it will continue for very long time. We forgot that everything can change in an instant.
Fear – when you are afraid to miss a profitable move or of losing money, you can make irrational choices driven by fear.
Poor attitude toward money – if your money management is not the strongest point (usually for emotional traders this is the weakest point), you will soon will be out of money, before you even have a chance to establish yourself as a trader.
(2) Remember that single loss is not your fault:
It’s not even the market’s fault. And it’s not your system’s fault. It’s just a loss. No trader or system can guarantee 100% winning rate. So, losses should happen, and will happen, accept that there is no one to blame, because there is no guilt in losing.
(3) Shore up your system:
If the losses prevail over the winning positions, then check your risk-to-reward ratio first. If each of your losses is less than a third of your single winning position then maybe your system is intended to work with 65% of your positions in the red zone? If your risk-to-reward ratio doesn’t compensate your poor loss-to-win ratio, you still don’t have to blame yourself, the market or your system
(4) Remember that a single winning position is not an indicator of your success. The same goes for losses – don’t treat a single win as your accomplishment. It’s just a part of the routine process of trading Forex.
Goodluck to you all trading
Emotions are the one of the greatest problems of being a Forex trader. Almost every beginning trader, who starts with the demo account, experiences a great success in his or her trading, but fails to carry this success to the real money account. The problem is letting emotions get in the way of rational judgments. When we lose, we feel frustration and sometimes even despair. Winning can cause us to lose control over our actions and turn trading into a gambling, or cause a serious over-trading problem. Calming greed and taming fear will help you to overcome trading Forex in an overly emotional way. Here are some suggestions to help you.
(1) Recognize the emotions involved:
Greed – human beings often want more! When market goes as we expected, it is too easy to believe it will continue for very long time. We forgot that everything can change in an instant.
Fear – when you are afraid to miss a profitable move or of losing money, you can make irrational choices driven by fear.
Poor attitude toward money – if your money management is not the strongest point (usually for emotional traders this is the weakest point), you will soon will be out of money, before you even have a chance to establish yourself as a trader.
(2) Remember that single loss is not your fault:
It’s not even the market’s fault. And it’s not your system’s fault. It’s just a loss. No trader or system can guarantee 100% winning rate. So, losses should happen, and will happen, accept that there is no one to blame, because there is no guilt in losing.
(3) Shore up your system:
If the losses prevail over the winning positions, then check your risk-to-reward ratio first. If each of your losses is less than a third of your single winning position then maybe your system is intended to work with 65% of your positions in the red zone? If your risk-to-reward ratio doesn’t compensate your poor loss-to-win ratio, you still don’t have to blame yourself, the market or your system
(4) Remember that a single winning position is not an indicator of your success. The same goes for losses – don’t treat a single win as your accomplishment. It’s just a part of the routine process of trading Forex.
Goodluck to you all trading
Always Preserve Capital So To Trade Next Time
Miembro desde Sep 24, 2012
posts 26
Dec 19, 2012 at 11:03
(5)And last but not the list, Patient is the key to trading, always be patient.
Always Preserve Capital So To Trade Next Time
Dec 20, 2012 at 04:52
My problems starting out was over trading. I felt like I always needed to be in a trade, or I was missing something. What I ended up missing was my money.
Now after learning that there is no shortage of trades (haha) I can wait for the setups I am looking for and then trade. Sometimes the best trade is no trade.
And your number 5 yes. Patients was a big down fall for me. If my trade was not going the way i wanted it to I would close it. I never let the market do its job for me. In and out of trades like an idiot, expecting immediate rewards.
Needless to say they never came.
2 years later.
I am patient and only trade when my strategy set ups are there.
Thanks for the post
Now after learning that there is no shortage of trades (haha) I can wait for the setups I am looking for and then trade. Sometimes the best trade is no trade.
And your number 5 yes. Patients was a big down fall for me. If my trade was not going the way i wanted it to I would close it. I never let the market do its job for me. In and out of trades like an idiot, expecting immediate rewards.
Needless to say they never came.
2 years later.
I am patient and only trade when my strategy set ups are there.
Thanks for the post
Miembro desde Sep 24, 2012
posts 26
Dec 20, 2012 at 14:15
(editado Dec 20, 2012 at 14:15)
Yes, but there seems to be this evil spirit that push people to trade at the wrong timing in forex, it take a good patient person to overcome that
Always Preserve Capital So To Trade Next Time
Dec 21, 2012 at 04:02
universalfunds posted:
Yes, but there seems to be this evil spirit that push people to trade at the wrong timing in forex, it take a good patient person to overcome that
Someone told me a couple of years ago ' Most retail traders are right when trading, the problem is they are right at the wrong time'
There are 2 axis on a chart , price and time . Time is the one that is ignored.
Miembro desde Sep 24, 2012
posts 26
Dec 21, 2012 at 05:13
Yes, that time = patient
Always Preserve Capital So To Trade Next Time
Dec 21, 2012 at 11:50
universalfunds posted:
If it can help me, then it can also help you, it is just a matter of sticking to it.
Emotions are the one of the greatest problems of being a Forex trader. Almost every beginning trader, who starts with the demo account, experiences a great success in his or her trading, but fails to carry this success to the real money account. The problem is letting emotions get in the way of rational judgments. When we lose, we feel frustration and sometimes even despair. Winning can cause us to lose control over our actions and turn trading into a gambling, or cause a serious over-trading problem. Calming greed and taming fear will help you to overcome trading Forex in an overly emotional way. Here are some suggestions to help you.
(1) Recognize the emotions involved:
Greed – human beings often want more! When market goes as we expected, it is too easy to believe it will continue for very long time. We forgot that everything can change in an instant.
Fear – when you are afraid to miss a profitable move or of losing money, you can make irrational choices driven by fear.
Poor attitude toward money – if your money management is not the strongest point (usually for emotional traders this is the weakest point), you will soon will be out of money, before you even have a chance to establish yourself as a trader.
(2) Remember that single loss is not your fault:
It’s not even the market’s fault. And it’s not your system’s fault. It’s just a loss. No trader or system can guarantee 100% winning rate. So, losses should happen, and will happen, accept that there is no one to blame, because there is no guilt in losing.
(3) Shore up your system:
If the losses prevail over the winning positions, then check your risk-to-reward ratio first. If each of your losses is less than a third of your single winning position then maybe your system is intended to work with 65% of your positions in the red zone? If your risk-to-reward ratio doesn’t compensate your poor loss-to-win ratio, you still don’t have to blame yourself, the market or your system
(4) Remember that a single winning position is not an indicator of your success. The same goes for losses – don’t treat a single win as your accomplishment. It’s just a part of the routine process of trading Forex.
Goodluck to you all trading
"Trading smaller, or not at all, for lower probability trades and larger for higher probability trades can transform a losing strategy into a winning one"
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