Here are a few key points that will help you for solving this issue-
Set Aside Emotion and Ego
In the world of Forex trading, it is very important to maintain a level of discipline and not let our emotions get the better of us.
Traders must come to terms with who they are! Traders should also be aware of the fact that they eventually will experience different emotions.
How do we manage these emotions will affect our overall decision-making and in terms of trade – profitability.
our mental state has a significant impact on how we behave and the decisions we make. In this section, we’ll see where emotions commonly experienced traders, utilizing their emotions
When thinking about our emotions in Forex trading, there are two standing feelings that every trader will go through. Fear and greed. Fear of affecting the decisions of traders in that traders will be less inclined to take risks.
Traders can see opportunities in the market but the fear can be so destructive that the trader runs the risk of cases ‘analysis paralysis’.
Once a trader opens a position, fear can make traders closing positions early and often before hitting the stop loss targets.
If the position has crept into profits, fear can keep us close positions too early to not lose any benefits. Adhering to the position for a little longer could result in hitting the target and earn more profits.
When the position is the loss Generally, fear does not allow us to behave properly. Fear can destroy everything! Not only in trade but in real life too.
Greed. As defined in the Cambridge Dictionary, is a very strong desire to continue to get more of something, especially food or money – the latter is more appropriate for the purposes of this article.
Greed can make us over trade, taking too much risk and account balances drain fast enough!
Traders motivated by greed will enter the market without a real strategy, putting them at risk of account balances as well as some frayed nerves.
A common misconception in trading is that the natural emotions we go through to be ignored. As we know from real life, ignoring the problem will not make it go away.
Often can make it much worse! So when we think about how we feel when trading, we should think about utilizing different emotions and use them to our advantage.
There are things that the trader can do to harness emotion and make us more successful.
Reducing The Size of The Position
When using a larger lot size, it is only natural that there will be an increase in adrenaline being pumped around the body.
Are you an emotional person?
Greater trade position is naturally translated into greater emotional tension. So if we reduce the size of a can position this in turn naturally reduce stress levels we produce a clearer thought process and theoretically – better trading decisions.
Keep a Note or Journal of How You Feel
Write down exactly how you feel at the time of the transaction. Then we can look back to see what the catalyst for how we felt at that time.
What we actually felt at that moment can be very valuable later when learning to identify specific emotions attached to the different assets we choose to trade, we choose the lot size and the size of the initial investment.
It is knowing where emotions are detrimental to our trading account that is the trick to success here. Keeping a log helps us analyze our own performance and identify areas for improvement.
What is important is to avoid being sucked into trade retaliation. Merchants can sometimes fall foul after significant losses.
This is where the merchant will apply to ‘catch up’ their losses and get back directly involved in the new position when the best course of action might be to take a step back and take stock of the current situation.
Use a Mix of Analysis
When doing your analysis before engaging in a position, it is important to use a variety of technical analysis, fundamental analysis, and sentiment analysis.
It is also useful to use a daily analysis. TopAsiaFX own site daily market news updates while also lent its users access to the economic calendar.
Signing up is totally free! Users can enjoy easy access to global, the latest economic news to make a more informed decision when entering the trade.
Choose a Strategy And Stick To It
It does not have to be a rule to your trading career hole but should the rules be adopted for certain positions only open when trading a particular asset.
When managing our emotions is important to have a plan and stick to it. It is often easier in mind than action but maintains personal discipline and control will, in theory, produce better results in the future.
To conclude, it is key to keep ourselves grounded, do research and make use of the economic calendar. Abundant material online to help merchants.
The key is in adding the right ingredients to mix in accordance with YOU! Identify what kind of person you fall in and you will quickly be able to identify what strategies will work best for you and which style is more suited to your personality.