FXOday posted: Greedy is like an enemy that appears from own minds, usually, traders want to make big profits in a short time by increasing lot size, or open multiple orders without pay attention to the risk involved, usually, the result of greed only will leading trader fall in regret, because often greedy making big loss in trading and if faced stop out account hence will losing opportunity to make new trades
So true. Like so many people have been up 10/20% and they want it all and they want it all yesterday instead of being happy. Thats why a small account is harder to trade because the gains are small like 50/100/200 when the trader wants 1/2/10k profit
This type of mentality that some traders have had will not be useful in future. You cannot expect to make $1k profit from $50, that is so unrealistic and unimaginable, unless by chance you got very lucky or market become easier to predict. That comes in very rarely.
Human beings are such kind of creatures, when they achieve a certain good, they automatically want even more. But it should be understood that the combination of trading and traders’ psychological mistakes entails a number of dangers that in one way or another negatively affect traders' trading account.
Greed is very harmful for making decisions and trading. I believe that the only way to eliminate emotional factor is to make trading strategy as objective and accurate as it is possible. Like if you decompose your decision making process into simple and objective steps, you will hardly experience any emotions during trading. It is something like solving equations where you deal with the numbers which can be called facts. Trading strategy should look like solving quadratic equations where you know what to do next in order to come up with the right decision.
As a newbie, due to excitement in earning profits and gaining knowledge about the forex market, should start with a small account with a small opening balance of $100AUD, and engage in currencies like USDEUR with an experienced broker.
Beginners cannot cope with the emotions which they experience during trading. It requires some experience and skills to stay away from psychology and turn to common sense. That is why it is better for the beginners to start trading microlots and avoid risking your whole trading budget.
Actually, as human nature, as greedy not only beginners but experienced traders also possible appear greedy on their minds, especially when they look the confidence analysis, will increase lot size because they sure will obtain profit, but what happen the market is dynamic, one tick changes will make all plan messed up when greedy trading.
If you understand psychology and money management, forex can become much easier for you. It’s greed that makes us impatient and take risky decisions, whose outcomes make us the part of the 96% traders who lose money.
Nakedize posted: If you understand psychology and money management, forex can become much easier for you. It’s greed that makes us impatient and take risky decisions, whose outcomes make us the part of the 96% traders who lose money.
Yes. I agree with you. Most traders lose their money because of their greedy nature.
It’s not the fault of new traders to feel greedy at the beginning of their career. Most of us get to know about forex trading through a highly unrealistic ad showing the success story of a really profitable trader. While they show all the good things to attract new traders, they hide the hard work, years of failure and unwavering will power that is required to make it to that level. New traders think that if someone else can do this, it must be easy and they can do it too. It’s only the personal experience that uncovers the reality.
Greed is only one emotion which is experienced by a newbie on the market, unfortunately. Beginners are bad at controlling their feelings during the trading session because they should learn how to work with their own psychology.
Sometimes beginners with some learning is better than with no learning. Beginner with some learning think they are expert and will not only lose their money but go on forums and tell everyone their bad ideas
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