In the way I understand what this practices should be of.
If one could away be in control of aims desire of how much you want as your return profit with your investment.
Familiarise once self with one price action is a good practices.
Avoid emotion by trading where and how emotion is absent -
- stop day-trading.
- enter trades by orders set in advance.
- follow trends, don’t trade reversals.
- always set a stop-loss but base it on the volatility of what you’re trading, so it should probably never be hit.
- decide in advance what chart TA features would make you get out for a loss or a profit, and watch for them to appear.
- stop screen-watching: set a time when you will check positions - not more than 3 times per day.
- never watch TV market news.
That was wonderful but can you enlightening me of TA chart features…
These will depend on what TA features you need to see according to your strategy in order to open a trade. It could be that price has been going up for X days, price has risen X% in Y weeks, you see 3 higher highs and higher lows in the last month, the XX EMA is sloping upwards, the YY EMA is above the XX EMA, the XXX indicator is reading above 70% etc. etc.
So when you see these features, these are the things that made you open the trade (or as I suggest, set an entry order). Then, once you’re in the trade, you plan that if these features start to disappear one by one, you will exit the trade: you might say this feature must disappear or 4 out of these 10 features, and then you will exit.
Price can only do 2 things after you have entered - rise or fall. It should be possible to plan in advance what you will do when it does, and this will eliminate almost all the emotion.
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Recently I’ve seen a lot of articles about the fact that a trader must be unemotional and extremely reasonable. It seems strange to me, because we are not robots. We are ordinary people, which means that emotions are a part of our life.
Yes, we are emotional beings. The advice is to control emotions, not allow them to rule your trade decisions. If your decisions are driven by fear of loss, you will cut your winners short and let your losers run. If your decisions are made out of greed, you will enter bad trades that really had no profit potential. Learn to recognize what drives you and then learn to control it. To be successful, your trade decisions musr be based on facts derived from analysis - Indicators or Price Action as best suits your skills.
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Emotions must be controlled, the idea is that they do not lose control in case they have any request.
The key is not in suppressing emotions, but in acting as you have decided is convenient for you, even when there are strong emotions in the middle interfering and making it difficult.
Well, I think it’s more about the fact that a trader should control himself in the market in order to avoid unreasonably risky actions and excitement. This is really important, but it becomes one of the most frequent reasons why traders are not able to achieve their goals.
Yes, emotions are a real enemy, although without them there’s no real way, you can use positive emotions, and be nervous, I think that even the most experienced trader can not stay cool in any situation.
it’s unrealistic…
No, it is not unrealistic. I’ve seen many people handle losses without emotion. It comes from experience knowing that you do not always win, but when you do, the winnings will be greater than the losses. Experience and confidence calms the nerves.
I can’t even imagine how it is to lose money without emotions. In this case, I always perceive it emotionally.
If you have a quality trading system or algorithm, then emotions can’t stop you. Because you can be nervous all you want and still stick to the original plan.
This is important - everything else is not!
Emotions are useful.
If you’re in a certain trade and you’re losing sleep or you’re excessively anxious or you’re depressed when its stopped out - you’re doing the wrong thing. I don’t mean you took a buy 6 minutes too early or 2 pips too high on a bullish engulfing candlestick - I mean maybe you’re trading a market you don’t understand - or maybe a strategy you don’t understand - or you don’t think your broker in Belize is ever going to honour your trades - or maybe you’re trading off 5-minute charts and you haven’t even learned yet to trade off dailies.
Don’t suppress emotional signals - listen to them - do something about it.
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It is very important to maintain risk management. Many times the risk is not managed by giving priority to emotions. Discipline is required in every trading. It is not possible to trade without discipline. Such as how to trade, where to set the stop loss, how much to use the risk-reward, how to do money management, all these things must be planned. It is not possible to trade without a plan.
Lots of practice is required to develop trading skills. It is never possible to make a profit by trading with emotions. Many traders cannot make a profit by trading for a long time because of their emotions. If you want to survive in trading, you must control your emotions.
It is very important to have some hold of emotions while trading forex since it does not go well with the decision making process.
There is no place for emotions in Forex, it will only ruin your trading. In Forex, the only thing required is your knowledge, skills and consistency.
We humans are full of emotions, we can’t avoid it completely. Decisions driven by fear of loss and greed, ends up with loss or no profit. So, it’s better to learn how to control your emotions while trading.
Emotional Management is extremely important while trading. If you are successful in managing your emotions, you’ll be more focused while placing your trades and it will surely result in good profits.
Hello Victor and rightly said. I’ve noticed many fellow traders succumb to emotions while trading and eventually losing valuable money. Knowing when to enter and exit the trade and put a stop-loss limit without becoming greedy is I guess something that would require a lot of practice.