Don’t Let Emotions Take Control of Your Choices
Eliminating the Emotional reactions is key to trading success. To do this, you need to avoid emotional triggers that push you toward rush illogical decisions.
The four emotions that traders suffer from most often are fear, hope, greed, and regret. The two main points below are just a sneak peak of the don`ts when trading.
Don’t ever be confused in the market
Have you ever felt like the markets know your every move and its out to torment you?
If yes, you`re probably confused.
If your confused in the market, you will end up losing money and taking a toll emotionally and psychologically. The market either gains or losses- Up or Down. With no regard to you.
Confusion is brought by lack of consistency if your trading actions or lack of knowledge.
On closer observation, you will find that all the wrong decisions have a logical explanation-most probably Fundamental or a Technical information you overlooked.
Have a precise, unambiguous reason for all your trades. Replicate it over time. Most importantly have an exit plan ready for when you`re wrong.
The market does not keep score of how many times you`re right…you shouldn’t either.
Statistics show that traders will most likely have a high winning streak but burn out eventually.
How is this? The emotional trigger on MT4 is the account history.
Traders love to keep a clean account history. Every once in a while, they peek at it and feel good about the high winning streak, turning away from the reality of negative open positions.
They don’t want to mess the “always winning, no losses” record. When these positions finally close, its by a margin call- wiping out all those treasured gains.
The way out is to use of statistics. It’s a fact you will lose- as a matter of fact, be prepared to have more losers than winners. If you haven’t accepted this yet, you are far from being profitable.
If a statistician came at the same impasse, he would in no time realise that his profits trades are precious and would seek to maximize his profit per trade to be greater than his loss per trade.
Even with a win rate of 30% he would still be up overall. Most importantly would be comfortable losing knowing its part of the game.
These two ways will drastically take the emotion out of your trading endeavor and help you have a more courageous approach.