How do intelligent taders OVERCOME emotion?

To feel the fear, sit and watch your trades minute after minute and try intra day trading on a demo, without a real system. You will lose !

To minimise the emotions, set and forget !

The “greed” is what gets us in to sub-optimal trades in the first place and a few other self-destructive things.

[Edit - and never forget, we are NOT “Investors” - we are Gamblers looking to take our bets when we have an edge ! - We are just as susceptible to “Gambler’s ruin” as any other gamblers ! ]

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If you’re trading you must have a strategy. You must from demo trading and experience know the win rate of your strategy and the maximum loss per losing trade. You must know that in any long run sequence of trades even the worst results likely will not destroy your account.

Therefore why worry about the losing trades? You can’t avoid them, you have built them into the strategy. And they won’t stop you trading because you keep them individually small and collectively not serious.

Losing trades are not the problem, they’re just like an admission fee, or taxes, or utility bills. Keep at it.

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[quote=“Jaavos, post:1, topic:118333”]
I am beginning to understand how unavoidable it is to have losing trades. With those losing trades, since we are humans, there are bound to be emotions attached to those losing trades.

So, how do we as the "fragile’ investors we are, overcome these emotions?

I can imagine being able to control, or ignore, one’s emotions can lead to proftibale results! I would love to begin mastering these ideas or processes.[/quote]

In my humble little view of things, the root cause why losses become an emotional problem is not actually so much to do with the losses, rather it is due to a lack of confidence in making gains.

If the Pieman said to Simon every time you give me 20 dollars I will give you 100 dollars back then Simple Simon would be coughing up 20 dollars all day long…or at least as long as he had confidence that the Pieman would keep his word.

In the same way every business incurs some costs in order to achieve a profit. The key issue for every business is therefore, “can I make a net profit?”

For traders, it is the same principle. If you are not in the market, you cannot make a profit. If you are in the market you will sometimes make a loss. The only issue is does your trading method, combined with your risk/equity management, generate a net profit over a period of time - and do you have the confidence that it will do so.

When your confidence is sufficient that your trading business makes a net profit, then losses are nothing more than a component of making a profit - nothing to be concerned about or emotional about - just like any other business, we just try to minimise the costs (not avoid) - and maximise the gains. That is optimisation.

As Tommor also said:

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The common thing I guess every trader face. The more you can control your emotion the more success will you get in your trading. Though my trading career is about 3 years still I have to control my emotions very cautiously. I tried to not look at my charts all the time. Before get into any trades I tried to calculate the result into my demo platform. Once I get a good result I jump into the real trade confidently.

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You just need to accept all the ups and downs of trading. Losses are part of the game, an inevitable part I might add. Once you accept this simple truth, you will be much confident, less emotional and you will not make so many mistakes provoked by negative emotions like fear and greed. Besides each mistake should make your strategy even stronger.

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Excellent point @Simple_Simon!

Hi @Jaavos

In addition to what has already been said, we suggest you keep the amount you risk per trade small relative to the size of your account. This puts you in a better position both financially and emotionally to ride out losing streaks. You may find this earlier discussion about risk management helpful: How much units cost

As @Simple_Simon highlighted, it’s important to hone your trading strategy, so your confidence in it can grow. This can be done through study, backtesting and forward testing which are discussed in this thread: What to do when not actively trading?

“It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.” - Sun Tzu, The Art of War

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nice ! well said :slight_smile:

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The best thing one can do, in my opinion, is to trade. Trade on a demo account, later do so on a live account. But don’t just trade blindly - learn from every mistake, every mishap, every profit, learn all that you did wrong, all that you did right, gain confidence. The more confident - rightfully, justifiably confident -you are, the easier it will be to overcome your emotions.

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You can’t be “human” if you want to be an awesome trader LOL

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After careful consideration, and painstaking questionnaires… The obstacle responsible for your silence has been removed. Speak now or… you know the rest.

I don’t think there’s really anything that can “dull the emotions” other than just doing it, no matter what the endeavor is. If you go through the trading process enough, you’ll both take profits enough and get punched in the face by the market enough to start understanding that it’s about the total body of work, not individual trades.

Trade small and over time you’ll see it’s about managing risk and building wealth over a long period of time; that’s when individual trades start to hardly phase you at all. At least, that’s how I see it… hope it helps.

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To take emotions out of trading -

  1. keep your system SIMPLE: know what you’re looking for in your preferred set-up and be able to recognise it instantly when it occurs

  2. make the rules of your system OBJECTIVE: prepare definitions of the patterns or price action you’re looking for: the set-up either complies with these or it doesn’t, no maybe’s

  3. TRAIN: run the strategy in demo or in micro-stakes or in back-testing so that its rules cover every possible scenario

  4. PRACTICE: run the strategy with micro-stakes until its either consistently successful or it breaks

  5. ACCEPT that unless you have a 100% win rate, you have built losses into your strategy: when they occur, they are part of the plan, not mistakes or failures or bad luck or market manipulation.

This job ain’t easy.

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Try being in a war zone, not knowing whether you will live until tomorrow… then come back and see whether losng a few dollars really matters that much ! :wink:

“Treat Trading Like A Business” as i did & earned a ton of money. I am sharing my personal experience that how i made money from trading specially XAU USD ANALYSIS by taking special guidance from Multi Management & Future Solutions.

Control Those Critical Emotions

Here are 5 down to earth tips to enable you to figure out how to be beneficial and control your feelings:

1. Gain some new useful knowledge About Trading.

2. Play out Some In-Depth Market Research

3. Paper Trade Until You Fall Over.

4. Compose A Trading/Business Plan.

5. Break down 5 Completely New Charts.

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Emotions should be controlled in trading because it leads us towards revenge and greed factor. It can be control like others do control on it so first we should have proper knowledge of Forex trade and spent three month in demo account.

It is not a matter of intelligence to hide emotions. It is training regular practice and do trading in realistic way that will help any trader to involve less emotions. Many genius traders are fail in this task. When our target and acts are realistic we will definitely overcome emotions.

In line with these suggestions @Jaavos, another solution to consider is automation. If you can program your trading strategy, or have it programmed for you, that could help take your emotions out of the decision making process.

That is some of the most practical advice I’ve seen on the topic. Thank you.
I will try to implement this in my own trading.

you cant overcome emotions. successfull traders dont overcome emotions and they dont even try. you must learn to live with them and use them in trading.

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How would you suggest to use emotions in trading? I confess that when I trade emotions just make me make irrational decisons.