I have been trading for a long time, and I’m fascinated with how greed coincides with forex.
Greed means wanting more, more, and always more. It’s like going to a buffet table and filling your plate to the maximum in the fear on your return, the table will be empty… continue reading
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What are your thoughts on greed, is it a good thing or a bad thing?
Hello LaoTzu
Im of the opinion that greed can be a dangerous mindset for a trader. I think greed and fear are the 2 main emotions a trader should avoid.
Instead of letting greed motivate me, or even focusing on profit for that matter, I do the opposite.
I focus on minimizing risk at all cost.
Happy trading to you
How do you go about minimizing your risk?
I think I’m somewhat backwards, I enjoy greed, but its out of control greed that I have a problem with (if there is such a thing)
There is - but it’s not really “Greed” - It’s more a FEAR - “Fear of missing out” - THAT is a real killer !
I only risk .5% to 1% max per trade
I trade optimal setups that occur under optimal market conditions
I move to a breakeven position at predetermined levels.
I will sacrafice potential profit in exchange for risk reduction
I will close a trade early in order to cut my losses
I average down within a designated “entry zone” (this is a big no no for most traders because its adding to a losing position. I dont recommend it but its the perfect entry method for my system.)
I dont allow emotion to enter into my analysis or decision making
I would offer this thought: There is nothing wrong with wanting the most that you can get. Greed, IMHO, means never being satisfied or happy with what you have. It’s not so much an issue of “wanting more,” as you wrote, but of always needing more.
The real problem with greed is that it can cloud a trader’s (or anyone’s, for that matter) perspective and judgement. It can push you into making unwise trades and investments because you see the never-ending possibilities of “what if.” It can make you invest more than you should because whatever you have just isn’t enough.
Don’t confuse greed with ambition - they need not go hand in hand.
“Fear of missing out”…
Id agree that fear is a major contribution to bad decisions when trading, both greed & fear depletes ones account balance, albeit in different ways. I think greed reduces ones account balance because of an inflated ego or having a God complex; whereas fear reduces ones account because of lack of confidence in oneself or integrity.
But the paradox is that without greed, one could never achieve true riches. Because no matter what your risking per trade, you could always be risking less. Therefore I believe greed is need in our profession, but out its out of control greed which I think is dangerous… among many other issue regarding speculation.
Does anyone else implement any measures that help reduce the emotion known as Greed.