Fear and greed and other emotions should be treated as potential threats to your account. That is why it is of major significance to eliminate all kinds of emotions from your decisoin making process. There are lots of ways to do that, but I feel that the best way is to make your trading strategy as accurate and precise as it is possible. It should be like 2+2 which will tell you the facts without any connotation.
Some negative emotions will not help you to maintain consistency in trading when you are trading Forex. One of them is greed. It is never possible to trade with greed and fear. It has a high percentage of loss.
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Often, fear and greed are identified as the main drivers of the financial markets. It is clear that this is an oversimplification, but fear and greed play important roles in the psychology of trading. A successful trade depends on understanding when to embrace these emotions and when to tame them.
Fear is the main enemy of traders I guess. There is nothing worse than have a fear to open a position. You always hesitate and it makes you feel worse and wrose, as emotionally, as physically. I agree with your words on hundred percent. Fear bores lots of issues in traders. Moreover, it's very difficult to get rid of sense of fear. Of course, you can open positions as you want and gradually you get rid of this sense, nevertheless it doesn't guarantee that you won't get that feeling again in future. The more you win, the more you are confident. Every loss bores more fears in you, especially when you trade on your last funds. Don't trade on last funds, postpone this idea until the better times.
When anyone starts out on a forex venture, he must know that forex trading is a risky affair. If you are fearful of taking any risk, you shouldn’t start at the first place and now if you’ve started, keep yourself open to the risk. Fear can make you lose countless opportunities and you’ll overthink even a clear opportunity. It’s not possible to avoid risk but you can control it to some extent by:
1. Not risking more than your tolerance. 2. Not opening too many positions at once. 3. Using stop loss. 4. Keeping the account size smaller. 5. Building a trading plan and maintaining a trading journal.
There are two aspects to 'fear'. One is when fear hits your anxiety level and you make wrong decisions in trading, whereas the other is when fear of loss can boost you to learn, expand your knowledge, avoid greed, and gain profits. It’s all about how you handle your fear and turn it into profit.
davemack posted: There are two aspects to 'fear'. One is when fear hits your anxiety level and you make wrong decisions in trading, whereas the other is when fear of loss can boost you to learn, expand your knowledge, avoid greed, and gain profits. It’s all about how you handle your fear and turn it into profit.
Very true, i think there is a healthy level of 'fear' as you can it to help you stay on your toes and alert. Getting too comfortable or lax is very dangerous in trading