It is said - and wisely, I believe - that an emotional trader and his money are easily parted.
And yet in spite of working with only a demo account, I find myself as attached to it as I would to a live one. It is not uncommon for my heart to sink when I see the market take a nosedive when I went long; and it is equally not uncommon for me to obsessively check Oanda’s web interface every few minutes for updates.
And, of course, since markets move in zigzags rather than straight lines, I break a sweat every time minor trends turn against me - and my finger starts hovering around the “Close Position” button as my confidence in the secondary trend starts to wane.
Of course, this has its own advantages - I sometimes end up getting out of trades that would have gone against me had I lingered there longer. But more often than not, it ends up costing me money, as I close a temporarily unprofitable position only to see the trend go exactly the way I expected it to.
From reading this forum, I know that, to be successful, I, as a trader, need to emotionally detach myself from the money (whether real and virtual) and make decisions solely on calculations, not emotions. Unfortunately, given that uncertainty is the only constant in the market, when the trend seems to turn against me, that alone is often enough to make me reconsider my calculations, question my support and resistance lines and generally cause me to close the position prematurely.
For example - at the time of writing, I believe that the Pound’s position against the greenback is unsustainable, and that it’s going to take a plunge. On the basis of that expectation, I went short - but with the market fighting me every step of the way, I start questioning my assumptions and wondering whether the plunge really will occur.
So - do you have any advice and/or recommended reading for improving my trader psychology?
