You need to learn to control your emotions while trading. If the high volatility of the market makes you anxious, trade when it is low. If you are afraid of losing money, take a walk after each trade and find reasons why you want to keep trading. If you are not sure about which way to go, practice on a demo account. You will have to find ways out of emotions to be able to stay in the market.
Traders need to have a good emotional quotient to make trading decisions rationally that are based on facts derived from technical analysis.
Emotions influence trading decisions which may result in losing the trade.
Emotions can not be ignored or suppressed but the impact of these emotions can be minimised by having a realistic approach toward trading.
If emotions are a challenge for you, the best I can suggest is staying away from the market when it’s highly volatile. You may easily become frustrated when you don’t understand which way the market is going. So, just take a break when you don’t understand which direction the market is going.
Whatever reason you trade for - it’s emotion driven. Is it desire to get more money (or even greed)? Desire to leave work you don’t like? Or you like to be right? Winning the game? (ah that shot of dopamine)
We trade because of various emotions and it’s almost impossible to detach.
There is however point, where emotions CAUSED by trading are difficult to stand. Anxiety, staring at charts all the time during open position, jumping in your chair when market moves a little toward your Stop Loss, feeling anger or pain when Stop Loss is hit, beating with yourself if open next trade etc.
What can help (not necessarily solve the problems):
- Get back to demo and learn to take losses. Try to treat demo seriously and trade for a while. You can even make a journal to write what you feel and why. Take (many) losses and maybe you will get used to them. For some time I was dropping small change to “jar” for every lost demo trade just to have any feeling of loss (It’s very hard for me to treat demo trades seriously)
- Think about automating your strategy. This is sometimes hard to do, but allows probably best emotional detach. Just don’t look at results too often
- Simplify trading 1 Set Stop Loss, Take Profit and forget about the trade. It may not yield the best results, but it’s less stressful. Moving SL, TP, partial closure of positions, adding to winning ones makes you “work” with open trade and attaching emotionally even more. Like with garden - if you care for your plants for long, it hurts more when they die. Let your trades reach their destination in peace (either in profit or not).
- Simplify trading 2 Ensure your strategy is simple and you fully understand your strategy. What win rate is historically expected? What drawdowns? What is average profit? Average Loss? The more you KNOW about your strategy the easier it is to accept it’s real results.
Before you every buy a stock you should know: Your run gain potential OR Target gain potential, the entry price with a controlled order type—NOT a limit order, especially in a volatile market condition. You should have determined your stop loss and thus have your R/P potential.
Emotions can be controlled. It is simply a matter of having a Trading Process that controls your trading environment. Every day you get into a car. There is risk driving of being in an accident. Yet you drive all the time successfully. And if you are a good driver, you keep your emotions out of driving your car.
The same thing applies to stocks and everything in your life.
Everything has to do with knowledge. The more you acquire it, the better trader you become.
Set and forget trading my friend.
Set price alerts once they’re triggered take your buy/sell position and let that suckere ride
I totally agree! Traders should make their trading decisions based on calculations and facts. Traders should also calculate their losses and profits and make trades accordingly.
Only if traders could understand how important it is to be practical while trading.
The simple rule of controlling excessive emotions in trading is not to take too much risk. If you find yourself getting wrapped up in fear or greed, it’s best to not look at the profit and loss summary and focus only on your trading plan. You may face situations where emotions will cause you to stray from your trading rules but following your plan can keep you on track. Write down rules for entry, risk management, exits and follow it so that you can act logically instead of acting on emotions.
Traders should be practical while trading in forex. Basically, it’s about having ample knowledge and being disciplined, so the more knowledge you have about trading the more you would know when to trade and how to trade which will eventually help you in controlling your emotions while trading.
Heavily backtest a system that works. Your fear will fade completely. Those saying otherwise dont know what theyre talking about. Until youve solved this puzzle, please dont say things with false confidence to mislead others
It’s quite normal to feel emotional while trading because emotions are a natural aspect of one’s personality instead traders should be more confident in their trading strategy.
just by been more careful
There’s a conflict here when it comes to dealing with emotional influence on trading.
New traders commonly make a decision as to their trading style which is driven by emotion - fear. Because they fear losing money and fear failing at a new venture, they commonly assume that the shorter the time in the markets the less risk. This drives them to avoid long-term positions and charts, seeking price chart time-frames measured in minutes: also to trade reversals, seeking immediate and significant price changes from a very precise point in time.
Having made an incorrect major decision - choice of trading style - driven by negative emotion, is it credible that a new trader will suddenly find a way to control the same emotion in minor decisions and so achieve success? Do me a favour.
It is very common for a human being to be emotional. But while trading traders need to have high EQ to regulate their emotions like stress, frustration, or anxiety.
Being emotionless would not be that easy for a human being. It’s not like removing a program from your software. Instead, learn to be practical so that you don’t set unrealistic expectations.
I would say embrace your emotions and your fear. The most important thing is not to lose money. If you weren’t scared then you’d lose your money very quickly.
When you set up a trade, as well as thinking about potential profit, think most about how it could all go wrong and try to mitigate against that situation.
It gets easier with time and a bit of success under your belt. Stay in longer timeframes and expect the price to go against you the minute you’ve opened your position. Thwn just hang in there. If you close the trade the minuite you’re even then you’ve wasted you time and energy.
What helps me is to stop looking at the screen once you’ve opened your position.
Emotions and trade do not coexist in the forex market. When you choose to become a trader, you must personally decide to address your emotional problems. In order to learn how to manage your emotions, you might study the threads on trading psychology. Good luck!