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Controlling emotions that cloud your judgment


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Controlling emotions that cloud your judgment

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Some types of emotion can affect the clarity of your thinking, and so impact any trading decisions you make.


A losing trade can make you furious - often simply with yourself, for making a bad decision.

But we all make mistakes - it's an important way to learn. If it happens to you, as it inevitably will one day, put it down to experience and make a mental note about what to do differently next time.

One common impulse in moments of anger is to try and 'get back at the market' by placing another trade. This sort of knee-jerk reaction - or 'hair-trigger trade' - is nearly always a bad idea. Alternatively, you might just start buying anything and everything indiscriminately. This is known as 'shotgun trading'.

Take a moment to sit back and breathe deeply, then consider objectively whether your proposed trade really makes sense and is in line with your overall trading strategy.



Another common source of annoyance is missing an opportunity - something that's easy to do in the fast-moving world of financial markets.

When this happens, it's easy to give yourself a hard time about it, repeating things like 'I should have bought there' or 'I knew that was going to happen'. But this sort of mentality can lure you into traps capable of undoing all your hard work at a stroke.

You might, for example, be tempted to place a belated trade anyway, or to risk placing a number of trades in quick succession - known as overtrading - to set things right. You might even 'go on tilt', a particular state of mind which means you make irrational decisions, rather than those based on the merit of what's right in front of you.

That's why, if the moment has passed, you need a few tricks to remain clear-headed until the next signal comes along.

Fortunately, those tricks are as simple as taking a break, casting an eye over your original trading plan and exercising a positive mentality - remember, missing a move is not the end of the world.


Suppose you've traded gold several times, and each time you've made a healthy profit. It might be tempting to start believing (perhaps subconsciously) that 'gold is your friend', and that it will reward you in the same way every time.


Once this conviction grows, there's a danger that you'll open further positions in gold without properly considering the current situation.

Unfortunately, the fact that a particular instrument has been profitable in the past is no guarantee that it will continue to perform for you. But likewise, if you've had a bad experience with a certain asset that's no reason to shy away from any future opportunities it offers.


There are times in all of our lives when events beyond our control affect our ability to think clearly.

It could be divorce, family illness, bereavement, or just moving house or changing jobs. All of these things will distract you from trading and could cloud your judgment.

The world of financial trading can be hectic, demanding your undivided attention. So when you're going through stressful periods, it's often safest to put your trading on hold until you can commit the necessary time and energy to it again.


Don't beat yourself up about poor decisions or missed opportunities. Learn from your mistakes and look forward to getting it right next time

To avoid going on tilt when things go wrong, take a break, remind yourself of your trading plan, and wait until you're back in a positive state of mind

Remember that sentimentality and superstition have no place in trading. No market is your friend or enemy, and every opportunity should be assessed on its merits

When you're suffering from stress in other areas of your life, it may be wise to put your trading on hold

Jude Flabian

As a human being, emotion is a part and parcel of our life. Controlling emotion is a tough job. But in forex trading, as a trader you have to control your emotions. Emotion can cause the loss in trading. Taking decision emotionally can not be suitable for you. You need to be practical. You should know when to trade, what to trade and how to trade. I am trading with Tpglobalfx. They always help me to control my emotions. They suggest me about the trading policy. So, it is quite easy for me to control my emotions while I am trading with them.


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Hi Guys, I didn't have the slightest of knowledge in Forex until taking the training course on www.romans12fx.com , they give you all the information needed to trade and also the real truths about forex! Plus you get a whole system to start trading with! Romans make it very simple to trade.

Billy Thompson

A trader should follow some rules while he is trading in the forex market. He also should have enough knowledge about forex. Low knowledge can be the cause of lost his capital. My advice for all traders to learn all the tools and techniques of forex very properly before starting the trade. Traders can get knowledge from so many sources. On the other hand, He has to know what should trade and when should trade.
He also needs to choose a good broker with low spreads and high leverage. Broker's demo account can help him to learn all the tools and techniques of the forex market. I am currently trading with TP Global FX. They help me to take decision at the right time in the right place. I love them because of their easy trading policy and customer support.

Jhon Dumani

Traders should develop a habit of being consistent with their trading rules. Sometimes, the most profitable trading strategy doesn't work as expected. So, traders should stop trading and change the trading rules as well as started improving their strategy after a few losing months. As a trader, I am trading with Forex4you. I always test my trading strategy in a demo account, which my broker provides freely.


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Yeah, emotions are very important in trading. You have to fix the rules and not break them even if you are 100% sure that it is safe.


New member
Rightly said @Sikabum. How well we handle emotions while trading is very important for a successful trade. One should have a fixed plan and rules before entering a trade. By doing so, confusions and dilemmas can be avoided and this helps to improve the trader’s logical decisions as well.