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How To Control Greed While Trading? You Should Know.

somrat4030

Well-known member
Staff member

Greed Control Tips Explain, By Forex Forum​


Greed control tips while trading

Greed is a natural human emotion that affects people to varying degrees. Unfortunately, when viewed in the context of trading, greed proved to be an obstacle more often than it helped traders.

Greed can very easily turn good deals into bad ones and bad deals into worse ones. This article provides a number of tips to control greed and how to stop it from interfering with your trading success.

Where does greed come from?​

The phase of popularity through which trading passes today is undoubtedly beneficial for the development of the sphere. At the same time, it has a downside: inflated expectations and unrealistic ideas about the trading process. The popularization of trading through the narratives of quick success and incredible earnings in the short term has pushed many people to a distorted perception of this area. Now, a significant percentage of newcomers expect that they will be able to quickly and easily earn huge sums of money without effort, relying purely on luck and good fortune.

In this state of mind, it is easy to lose your head from the first profits (which can really be the result of one-time luck) and fall into the abyss of greed. It encourages people to strive to increase their profits all the time, not appreciating the intermediate results, not being satisfied with what has been achieved, and not taking into account any risks or other factors that affect the trading process. And while many may argue that this characteristic is rather individual, affecting particular persons, it is still possible to follow a recurring pattern of its manifestation in many novice traders.

Examples of greed in trade:

  • "Doubling" unprofitable transactions
  • Adding capital to winning positions
  • Excess leverage

Greed can change your mental state by using your attention to maximize usefulness / happiness / wealth. The pursuit of these things often results in traders posting trades that they would otherwise never have thought of.

Once greed drives your forex emotions, you lose focus and abandon all of your trading plans.

Winning is good! But the euphoria of winning consecutively in forex trading may catalyze a craving for more and more money leading to extreme greed.

This excessive greed often causes a false sense of being in control, as it makes you less careful.

Is greed an emotion? To answer this question requires us to understand greed and the dangers associated with it.

Some risks associated with forex greed include chasing markets, over trading, and over holding on to forex trade.

Forex greed is egotistical and too much desire to get lots and lots of money from forex trading.

How greed works in forex trading


Greedy people might not recognise their own greed. To them, their actions are completely normal, logical even. They wouldn't have it any other way.

There are many different ways greed can infect your forex trading. Some might say that there is no place for greed in forex trading, that it has no benefit at all.

  1. Greedy traders don't set limits
  2. Greedy traders trade too much
  3. Greedy traders risk far too much
  4. Greedy traders can risk too little

If you really want to control your greed while trading, then you should join a forex forum. Inside a forex forum, forex experts share their valuable trading experience and knowledge. Which will be really helpful for new traders who want to improve their trading skill.

How to control Greed while trading

Here are some tips how traders can control their greed while trading:

1. Recognize That There Are No Shortcuts

Many people enter trading with the aim of accumulating wealth in a short span of time. This misconception is fuelled by success stories that draw media attention. You may have read about Tim Sykes, who began trading when he was in high school and made his first million by the time he turned 21! Sounds terrific, right? But what many of us miss is that Sykes achieved this by trading judiciously and even making mistakes, losing money and tweaking his strategy.

2. HAVE A TRADING PLAN

A trading plan contains the guidelines and rules you can follow to trade.

It tells you, when to enter a trade, how to manage a trade as well as how to exit.

Once you have these guidelines to follow, some how it will stick to mind that it is the right thing to do. In that case, your emotions will never determine your trading decisions.

3. Don't forget to manage risk

Many traders try to take very high leverage and put a large amount in the hope of getting more money in return. If you want to make a huge amount of money with a less size of trading account then it will be very dangerous for you. Before you put any trade don't forget to set a very strong risk management plan in your trade. If you can keep setting the trade without proper risk management, you will soon find yourself out of the market with zero money. By maintaining proper risk management you will be able to lower your greed.

4. Track your emotional state

You must always know what and why you are feeling. If you feel that you have lost emotional balance, pause for a while. It will be wise to stay away from the market for a short while after a series of losing or profitable trades. Such series can provoke strong emotions that might harm your trading. Hence, you should stop and calm down before carrying on with your work in your normal balanced state of mind.

5. Have a clear entry criteria

Your entry criteria have to be very clear, such that a 12-year-old can execute it. There should be no room for guesswork, else your greed will push you to start entering the market at random while thinking that you are following your strategy. And this can spell doom for your trading account.

6. Never do over-trading

It is one of the biggest mistakes the traders do out of greed, mainly the new traders want to make money fast and start over-trading, and after a few of their over-trades, they find themselves with zero money in their account. The more you will give importance to the money rather than the processes and consistency the fast you will lose your trading account. Over-trading will always lead you towards failure, so never trade in the market in the greed of making money fast.

7. PRACTICE SELF DISCIPLINE

You have to be able to tell yourself when to stop trading or even if it means no trades at all for some days.

Having a series of technical rules to follow greatly helps but you still need to have the discipline to stick with them.

You must learn to accept that success and failure are both part of trading.

Once you have learnt to accept a failed trade like you do for a winning trade, you will be able to learn from your mistakes.

8. Manage Open Positions with Take Profit Orders

Most traders place stop-loss orders to prevent excessive losses. Stop-loss orders get automatically executed if the price of an instrument falls to a pre-specified level, limiting the trader's loss on a position. While this is common, it is not so common to place take profit orders, which is also an important element of risk management when trading. Learn more about stop loss and take profit click here...

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Thank You
 

brunildafulton

Well-known member
This information really needs a spotlight. I have seen many people being greedy and ultimately losing the profit along with the initial investment. Greed is one of the main reasons for a trader’s failure. The information above provides a logical approach to this problem. Thanks for sharing.
 

Leonardo_fx

Active member
Good article, I agree with all points on greed and how to eliminate it. If you follow half of these points, then this will already be a positive result.
 

Paulsy

Well-known member
Trading psychology is an essential factor in money-making. Actually, it is no less important for creating a successful trader than trading knowledge and experience. Trading psychology is a key factor for profitable trading. While some emotions can be justified and managed like fear and greed, other emotions can be more complex and harder to be contained. Developing a successful trading mindset is very helpful in fully mastering trading psychology.

How to Develop a Sound Trading Psychology

  • Manage Your Emotions
Remember that fear, excitement, greed, nervousness and overconfidence are typical emotions experienced by all traders at some point. Mastering how to control these emotions can make all the difference between the success and failure of the trading process. Make sure you never make a trading decision based only on how you feel. Instead, let any decision backed by rational reason, market analysis or according to a trading plan. This way you'll avoid emotional trading and bad decisions.

  • Learn from Mistakes
Regardless of experience, traders make mistakes. The key concept is to embrace your own mistakes, learn from them and avoid repeating any. Check common trading mistakes to avoid in forex trading.

  • Overcome Greed
Greed is an overwhelming feeling that can lead to devastating decisions if not handled in the right way. It is the most commonly experienced emotion among traders, whether they are beginners or experienced. Learning how to control this feeling by acknowledging that you can't seize every opportunity in the market is very critical. Knowing how to achieve a steady process is also helpful.

  • Realize the Importance of Consistent Trading
Beginner traders often look for different opportunities which get them distracted between multiple opportunities without sufficient experience how to handle any. If you're a beginner, try to focus on a specific market and learn its fundamentals. The true success is to keep your trading as constant and profitable as possible.

  • Follow a Trading Plan
Developing a plan to serve as a guiding framework is very crucial to achieve consistent profitability in trading. It is pretty much like a road map that keeps you on track to your trading goals. A good plan will help you in making rational trading decisions, by sticking to its rules. Check how to develop a successful Forex trading plan.
 

Hogwash

Active member
This is an informative and eye-opening post. Sometimes we do not even realise that we are being greedy.
The most common mistake that a trader does not realise is over trading.
Traders after one lost trade feel anxious to compensate for the loss by making more trades and tend to lose more trades.
 

LamarKenyon

Active member
What a phenomenal post! Traders can't be emotional during trading. It has never bode well for traders and never will. Traders should refrain from emotions such as greed and revenge because it will lead to more losses than doing any good for them.
 

GlenWest

Member
Everyone doesn't really know that they are being greedy. For them, it comes naturally to keep chasing the market with the aim of making high profits. This leads to overtrading and losing more than you would have otherwise. Try controlling your greed in your normal life and it will help you control greed while trading also. Gain experience but never make decisions without analysing the market.
 

Snicket

Active member
Traders don't understand the consequences of greed until they face them. New traders are very focussed on making big amounts initially and they believe that by taking so many trades will help them to make money. They become reckless in trading and keep entering and exiting positions without thinking. This is why I believe that they must gain experience and see what it actually looks like to be greedy.
 

Accretion

Member
Another important point worth mentioning is an attitude of gratitude. Focusing more on the profit that you already have could make it easier to avoid greed. Just think about what all you have achieved and what can be done based on those achievements.
 

catherinacrowley

Active member
As per my experience in the market, I can see that greed is a result of the lack of knowledge and experience. A trader who has been in the market for years would never be distracted by unwanted market situations and would always do what is needed in a certain situation and it's not greed for sure even if the trader takes too many risks.
 

Linsang

Member
Emotions like greed and fear can ruin your trading career. To avoid being greedy, just keep in mind that you were only supposed to get the profits that you've received. So, be content with what you have achieved and stick to the process of trading.
 

WalletInvestor

Well-known member
Another important point worth mentioning is an attitude of gratitude. Focusing more on the profit that you already have could make it easier to avoid greed. Just think about what all you have achieved and what can be done based on those achievements.
I guess every person is different, but for me, adopting this mindset would make it more likely that I will experience greed - focusing on profits a lot, even if it comes from a place of gratitude, is usually not a good idea in my opinion.
 

brendalloyd

Well-known member
This is a very useful piece of information. It is important to learn how to keep away from greed. I think discipline is the crucial factor that can help a trader to avoid greed. A trader should make a rule book and stick to those rules throughout the trade to avoid any wrong decisions.
 

somrat4030

Well-known member
Staff member
This is a very useful piece of information. It is important to learn how to keep away from greed. I think discipline is the crucial factor that can help a trader to avoid greed. A trader should make a rule book and stick to those rules throughout the trade to avoid any wrong decisions.
Yes, Greed control is very important for every traders. Please explain more about your trading experience.
 

Spartan

Member
Definitely greed acts as the poison in your trading career and once we face losses we end up being more greedy. You don’t even realise that you’re being greedy and in order to compensate for the loss you’ve made you end up losing more. You need to understand that greed will bring you nothing except losses and the earlier you accept this fact, the better it will be for you.
 

somrat4030

Well-known member
Staff member
Definitely greed acts as the poison in your trading career and once we face losses we end up being more greedy. You don’t even realise that you’re being greedy and in order to compensate for the loss you’ve made you end up losing more. You need to understand that greed will bring you nothing except losses and the earlier you accept this fact, the better it will be for you.
For this reason, We all need to control our greed while trading. Could you please share us about how you can control greed while trading ?
 

Neology

Member
It may seem as though the market is a quick money making scheme, to newbies, and they often are thirsty for being part of the rat race and so, they get fooled by scammers and often fail to understand the correct way to approach the market. Hence, resulting in loss of capital as they do not plan ahead. They also lack discipline, which is very important to stay focused on your goal. When a trader is organized and calm, their only focus is to reach their goal.
 

Isonomy

Member
This is accurate. Most traders' downfall is their greed and trading with their emotions. This is very informative and helpful!
 
This is so accurate and helpful!Greed is what sinks every trader's boat. We all need to control our emotions more when trading.
 
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