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How to control emotion while trading? You Should Know.

Forex Forum, Best emotion control tips while you trading.​


How to control emotion in forex trading

Our emotions have a significant impact on the decisions we make. Trading is all about making decisions of what to buy, what to sell and what to hold. Most traders have a hard time controlling their emotions. Many of them have even blown up their trading account because of lack of control on emotions.

In this article we will discuss about how to control emotions while trading. Also, we will mention the exact actions to take when you think you are unable to control your emotions.

What is emotional trading?​


Emotional trading is when a trader or investor lets personal feelings and emotions impact their decision-making. Sometimes it can be helpful, but usually bringing emotion into trading is a bad idea.

Psychology

Trading Psychology is considered to impact and affect up to 95% of overall trading success. When we think about trading in terms of psychology, this is knowing when to enter a position and when to not enter a volatile market and leave the market alone.

A trader is their own worst enemy when it comes to Forex and it is their responsibility to come to terms with that. The trader is, after all, the chief decision-maker so it's up to the trader to introduce adequate measures to protect open positions. For learn more about forex trading psychology, you need to visit forex forum. Forex forum is one of the best places for learn proper about forex.

Here are some tips, how you can control your emotion in forex trading:​


1. Greed

The general definition of greed – excessive desire for more of something than is needed.

In forex trading expecting a higher return is the worst mistake you can ever do in your trading career. Greed prompts you to take trades continuously without realizing that the market will be open again tomorrow. So as a result of this trading behavior traders often ended up fall into overleveraging and overtrading. So, you have to avoid greed in forex trading.

2. Dealing with a losing position

No matter how diversified and well-tested a strategy is, there will always be times when it's sitting in the red. When losses start to grow, the emotions will distort our perspective on reality.

Cortisol is released by the brain – this is a stress hormone that interferes with thought, memory and rational decision making. This process is very subtle and happens below the level of conscious awareness.

3. Using stop orders

Stop orders are very unique tools that have been designed to help both the busy trader as well as the emotional trader. But its biggest advantage is that it helps you take control of your greed when trading, or more specifically removes greed from the equation completely.

Essentially what these orders do is help you set a specific price point of a financial instrument and register it on the software as a place to either buy or sell something automatically. For Learn more about stop-loss click here...

4. Remember the past

When the stock market dives, remember that this isn't the first time it's happened.

"The stock market has overcome so many obstacles," said Goldberg, pointing to 9/11, the Great Recession and the market crash of 1987.

"What happened each time? The stock market recovered and claimed new highs."
So, Remember the past when you will start trading. It's can help you to control your emotion in forex trading.

5. WAIT FOR A CANDLE TO CLOSE

A trader must not catch a candle which is still open. An open candle provides misleading signals which will leave you in a mess. Do not let your emotions drive your decisions while trading. Many times, these misleading signals are the reason for losing trades.


6. STOP TRADING AFTER TWO CONSECUTIVE LOSSES OR WINS

A trader starts feeling like a loser after two consecutive losses. Since they don't want to lose, they start doing revenge trading. Similarly, a trader feels invincible after two consecutive wins. They think today they cannot lose at all and they start taking some fast and bad decisions without proper analysis. So, a trader should stop trading after two consecutive losses or wins to control their emotions.

7. Overconfidence

If you hit a rich vein of winning trades, as your strategy works favorably during the current market conditions, overconfidence can rear its head. This can have many negative side effects, but the main one to be aware of is over trading.

The importance of emotion control in forex trading

THE IMPORTANCE OF CONTROLLING EMOTIONS WHILE TRADING​

The importance of day trading emotional control cannot be overstated.

Imagine you've just taken a trade ahead of Non-Farm Payrolls (NFP) with the expectation that if the reported number is higher than forecasts, you will see the price of EUR/USD increase quickly, enabling you to make a hefty short-term profit.

NFP comes, and just as you had hoped, the number beats forecasts. But for some reason, price goes down!

You think back to all the analysis you had done, all the reasons that EUR/USD should be going up – and the more you think, the further price falls.

As you see the red stacking up on your losing position, emotions begin to take over – this is the 'Fight or Flight' instinct.This impulse can often prevent us from accomplishing our goals and, for traders, this issue can be very problematic, leading to knee-jerk reactions.

Professional traders don't want to take the chance that a rash decision will damage their account – they want to make sure that one knee-jerk reaction doesn't ruin their entire career. It can take a lot of practice, and many trades, to learn how to minimize emotional trading. Learn more about forex trading emotion control at dailyfx.com

Instead, use time to research the factors that influence markets rather than relying on intuitions and guesswork. Or analyze your trading plan and see how it can be improved.

Even so accept that you can do all of the analysis in the world, and do everything possible but sometimes the market just won't go in the direction you expect it to. Accept that there are always circumstances that cannot be foreseen.

You can learn more about forex trading strategies and currency trading tips at forex.forex

Thank You
 

Profesor Pips

Well-known member
Most of us trading but have other incomes like job, so emotions play little role. All traders want to live from trading, but do you have a strategy which allow you to hold emotions, when you get 10 - 15 loss in a row, and you have to pay bills, buy food, take care of your family? This is real test your emotions.
 

Lateral Thinking Forex

Well-known member
The only way somebody can possibly live off trading income is to have an account balance of £50 - £100k upwards. Anything lower than this you would have to risk too much each month in order to make enough profit to withdraw a living wage... and that would be too emotional. Plus there are months where there will be zero profit.

Traders are better advised to compound their account over a number of years, so that they can build a decent sized fund. Only then can the give up the day job at trade for a living!
 

somrat4030

Well-known member
Emotions will always be there when you trade. It is better to learn how to control them. It’s not an easy task and takes time. I suggest all traders should read Trading in the Zone by Mark Douglas once. It is a good book on trading psychology.
You are experienced, i know, then why you doesn't share your knowledge with us. you can make threads and you can share your knowledge with beginners.
 

Finicky

Member
A trader who doesn’t know how to control his emotions while trading can make very impulsive decisions, which could lead to failure.
 

Lateral Thinking Forex

Well-known member
Emotions will always be there when you trade. It is better to learn how to control them. It’s not an easy task and takes time. I suggest all traders should read Trading in the Zone by Mark Douglas once. It is a good book on trading psychology.
That's a great book, I recall reading that in my early days of trading. Emotions don't even feature in my trading these days, I have a systematic strategy that I stick to and just treat it as a business.
 

Spartan

Member
This was a much needed post. Many traders suffer from losses only because they let their emotions be in charge of their trading decisions. One should never hand over the steering wheel to their greed or fear while taking up trades in forex. Your rational mind should be in control of what you do as a trader. Skills and knowledge can be acquired over time but having the right mindset is what helps a trader in the long run.
 
Emotions play an important role in trading since they influence the trading decisions, and as humans, we are highly subject to emotions, thus you need to hold your emotions in check while trading. Make decisions rationally.
 

skiascope

Active member
I don’t believe in putting limits before you explore the market. You must try your hands at everything that comes by, be it using a strategy or trading without a plan. When you face the consequences of trading incorrectly, you realise better. You will know how much being greedy costs and how you can save yourself from that.
 

Zooscopy

Active member
Emotions play a major factor when trading, and most of the time it plays a negative role. Traders who do not know how to control their emotions end up losing their capital out of fear, vengeance, overconfidence, rage, and doubt.
There are many ways to control emotions. Meditation and self-affirmation stands as one of the best methods. Then comes writing your feelings in a journal, then refreshing your mind and reflecting back upon the journal to make yourself realise what emotions can be harmful. If you have a therapist, you can also share with them your feelings or any personal circumstances that have been affecting your emotions when trading.
 
The tips are amazing! Most beginning traders have an issue with emotional control because they can’t really filter out trades and so end up making emotional decisions in the end. With a disciplined approach, traders would be able to make well-informed decisions over emotional decisions.
 

Sacralgia

Member
The best way to control emotion successfully, is by trading with low expectations and not worrying about losing out on opportunities. You need to mentally prepare for everything by creating a plan and sticking to it, there is no other way to manage your time. Once you lessen the risk level, you automatically get closer to making wise choices and reaching your desired point. Try to not overtrade, place stop loss and start small, always. Make life easier by directing your attention to what matters most.
 

Symphony

Member
Every individual has a different approach to dealing with stress. Some get excited, some go quiet. As long as you decide to make the right choice even in complete stress, then you know you’re above any external factor affecting your choices. I meditate to release stress hormones. It works for me, maybe you can give it a try and if it’s not your thing, do whatever you think could calm you instantly.
 
I have no idea how many of you will agree with me but controlling your emotions is not easy when it comes to trading. Your money is involved and you will obviously be thinking about saving it with every possible thing. Now if your concern becomes your greed, anger, or fear, it is something that you can’t really help with.
 

Whimsical

Member
When it comes to trading, most people overlook emotional control. When they look back on their trades after losing a particular amount, they are surprised to discover that they made dumb mistakes due to their emotions at the time.
 

Verves

Member
As money is involved here, a trader might feel negative emotions like greed, anger, fear, or overconfidence. It makes them trade in a bad way. Trading with negative emotions is never a good idea as it only makes one lose. It will never make you win.
 

Heirloom

Member
When trading, most people neglect to control their emotions. When they examine their trades after losing a particular amount, they are astonished to see that they made silly errors simply because of their emotions at the time.
 

Homostone

Active member
Time makes you good at everything including controlling your emotions. When you make a few trades in the market, you get an idea of what your actions result in. This keeps you from becoming emotional so that you can stick to your plan and make fruitful trades.
 

TildaTilt

Active member
With experience and consistent trading traders learn to control their emotions. Practising discipline helps in controlling emotions over a period of time.
 
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