Psychology and risk management

How did you feel when take a large loss?

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It’s been nearly 5 years now but I felt: Numb.

Dont let it happen to you, take 1% risk per trade. Dont break your rules.

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It is like losing your job a real kick in the nuts , keep the loss limited by controlling your mindset and risk management. If you become a risk manager rather than a trader the profits in increase.

The way I feel better is to look at loss as a paid lesson business cost

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Thanks for this piece.

Understand the mood of the market

Emotions are the key to understanding financial markets. However, it’s tough to make rational decisions based on them. Even if you think you read your emotions or other peoples emotions, you may get lost in trying to comprehend the feelings of the crowd. And the market sentiment is the emotions of millions of traders around the world.

Every trader knows the importance of emotions. You can see it in market volatility.

The two most dominant emotions

Fear and greed are the most dominant emotions among traders. They are either afraid of losing money, or they want to earn more. Greed is overwhelming at market peaks when the bubble is created.

On the other hand, fear takes over when the market hits bottom. Traders are panicking underestimating the real value of an asset. A savvy investor can see an opportunity for opening a long position in these situations. However, trading against the trend always involves high risk.

How to identify fear or greed? When you see a trend accelerating breaking new resistance levels without any fundamental explanation - no critical information that would justify it - you may expect the greed is in action. The same mechanism works the other way around with fear. If during a downtrends support levels are broken without an apparent reason, the fear may have taken over.

The market sentiment is very easy to read if you take a look back. Everything seems to be visible. Even if you are new to trading, you can easily spot greed taking over just when the bubble is about to burst. However, at the time of the bubble, hardly anyone notices it, even the wisest and most experienced traders.

It’s difficult to profit directly from fear or greed taking over. Even if you can read the past and present sentiment correctly, you need to know what the collective traders’ mood will be like tomorrow. Without any insider knowledge or ability to influence the prices with your trading volume it’s impossible to do it repetitively.

What is the best market sentiment strategy?

The best market sentiment strategy is keeping away from it. If you don’t use the most popular technical analysis tools and don’t trade reversals, you can avoid the riskiest moves.

Don’t chase the sentiment.Doing so you could develop a sustainable trading strategy with the right mixture of technical and fundamental analysis.

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Look, we’ve all got Google, not just you. We can all copy and paste, not just you.

What would be valuable would be if you could post some details of your own experiences in actual trading conditions.

Some of your posts in the last week have been random and not much to do with the subject of the BP thread. You never post a link, just a bunch of text as if its your own thoughts on a subject. If English is perhaps not your first language, use a translation tool.

Stop bombing us with your second-hand ripped-off nonsense posts or else GO AWAY.

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Rather than helping out on your thought, this is all you got to write as your contribution.

its boring did you copy this from a textbook ,

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its not very pleasant,also feeling of failure when you put a lot of time and effort into something, aswell as the financial loss.Though when something is challenging, i guess the efforts of success feel more rewarding.Its only money at the end at the end of the day, not ones health or the health of others , it comes and go `s through ones lifetime,it more to do with mindset

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Exactly " when you put a lot of time and effort into something as well as the financial loss" it actually depressing.

Thank for this piece.

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no problem have you had a big loss

generally we the traders after having a losses always try to recover that and ultimately lost whole balance. . its the main reason of emotions… nothing without it.

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yes its a emotions and a part of revenge trading . generally beginners always fall a great trouble by this attitude.

We just explain the ways of how to magane the market sentiment. The text is from our expert’s experence and we would like to share them with you. We don’t copy, if you need more detail experiences, you can chat with me directly.

We just explain the ways of how to magane the market sentiment. The text is from our expert’s experence and we would like to share them with you. If you are bored with them, you can neglect them.

Are you seriously saying you do not copy and paste into threads on this site? You need to try harder.

Regret.

I’ve only been trading just over a year and I took some big hits at first looking for that big score. Regret can consume you if you let it. “If only I had used a SL”, “if only I had listened to the advice of the more experienced traders”…

But you can’t dwell and you can’t give up, just learn from your mistakes, accept them as a cost of doing business and keep moving forward.

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It’s not up to two months this happened to me. I have grew my account to sustainable amount and the rest is history. Now, Nobody reminds me to manage risk tightly. I’m so strict to risk that Mr risk don’t understand me anymore.

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Recovery companies are sometimes a separate sort of scam, sometimes run by the same people who run the front line companies. They try and talk clients who’ve lost money into paying them even more to try to get their deposited funds back. Which of course doesn’t happen.

If you’ve lost a lot of money, seek legal advice from a legitimate legal practice. Don’t pick up some random contact from an unknown person posting on a forum.

I don’t think he does. There are too many spelling errors to have been copied or pasted.

Cheers

Blackduck