Emotions in forex trading always exist and this article aims to explain how to better cope with them. We know that controlling your own emotions can be at times almost impossible. Greed, desire revenge, anger, euphoria, all this is familiar to anyone who has ever traded on the financial markets. The fact that the trader is experiencing emotions is normal, in the end of the day, all people experience emotions. However, it is not normal that emotions interfere with our trading. Sometimes it becomes a real problem that needs to be urgently addressed, otherwise your whole capital might be in danger. Let’s see what kind of emotions are the most unpleasant for the trader and how we can deal with them.
Have you ever thought about how much time you spend looking at the charts. The trader must constantly follow the price and this is very tiring. The most interesting thing happens when you have an opened position. We place take-profit and stop-loss in order to move away from the computer and relax, but we feel something is pulling us to the monitor. We want to at least have one eye on it to see what happens, price falls or grows, do we earn or the trade is at a loss. Once you start to monitor the transaction your problems begin. No matter how profitable or losing a trade is , observing the price causes you to question your decision. Furthermore, you may start thinking that the market conditions have changed and it is necessary to evaluate the situation again. Remember, this is only an illusion.
There are some good ways to avoid such situation. These methods are very easy and immediately give a positive effect. The first thing you need to do is to stop trading on the minute charts. The higher the time interval, the stronger the signal, the more time you have to take a decision, the less you need to follow the price. Psychologically, it is easier to trade on the larger timeframes.
Secondly, apply Money Management. The more you risk, the more dependent you become emotionally. If you do not risk 50% of your capital in one transaction when you have opened the minimum lot size, then you should not really care how unprofitable or profitable your trade is. When at stake there are larger sums, immediately your big problems begin. All your mistakes would definitely go away if you start observing the rules of money management.
We know that some traders still set themselves goals for the day. Allegedly this helps reducing the emotional burden of trading in the forex market. If you have achieved your pips target then you can stop trading for the day. At the same time another question comes up- why limit yourself? As long as I do not violate the rules of my own strategy, everything is fine. As such, it is highly recommend you develop your own strategy that will best work with your own emotions.
Do not worry if you do not see immediate effects. Some people are more emotional than others. Give it some time and patience. Try to focus and take control of your own emotions. Follow strictly your strategy and we are sure that you will succeed.