Came across an article that called these the four demons of trading
- Greed
- Fear
- Euphoria
- Panic
Interesting tthat I never thought to include euphoria. I feel like we all talk about fear and greed as emotions to avoid but the highs of winning is something that’s also pretty detrimental.
In general I think it is not good to be in an emotional rollercoaster doing anything whether trading or doing anything else. It is mentally and emotionally draining and can’t be sustainable.
Is there anything else you think should be added to the list?
10 Likes
Yes, humans have evolved to avoid pain at all costs. FX trading becomes their nemisis.
Which is the rationale of the four demons above. For example, traders will cut winning trades and nurse losing ones - when a robot would follow the other way around.
You’re halfway there when you can cut losing trades without any emotional feedback. I hate losing but I hate losing big, more so. Now I can spot a losing trade a mile off - it’s the one that jumps into an immediate losing position and just won’t reverse back in your favour while you watch the loss getting bigger and bigger.
I hope that helps.
3 Likes
I think one should avoid being greedy and overconfident while making trades. Subsequently, keep yourself motivated when winning and losing in Forex. Make sure you have conviction and the right mindset while trading.
2 Likes
Well, according to my own understanding! Having a good trading plan so important! If you are trading here without proper game plan; surely you’ll be fluctuated very easily!
1 Like
You need a very calm mind while trading. The emotion you should avoid are greed, being impatient, and losing focus.
2 Likes
Maximum Forex traders are prone to emotion and they make wrong decision being submissive to emotion. So, it’s obligatory for them to get out of emotion because it’s the reason traders become losers for.
In my opinion, the emotions one should avoid are greed, fear, anxiety, and overconfidence. Trading requires focus and these emotions often cause a number of impulsive trading decisions.
That depends on you! What kind of trader are you? Are you a reactive one who is still learning to control their emotions? In that case, you should try to avoid greed, anger, overconfidence and ecstasy while you’re trading. If you aren’t, it’s still best to keep your emotions in check.
1 Like
Hmm, I try to avoid trading when I’m anxious, excited, angry, overconfident, or ecstatic. I find these emotions to be my downfall more than anything else, since they typically cause a lot of pain and a lot of fund drains to me.
Well said. My personal ones are anger, empathy, vengeance and cockiness. They will forever be my downfall if I let them.
I think some types of emotions are really harmful for us during trading, such as stress, greed, fear of loss and overconfidence, etc., and we should avoid these types of emotions while trading, as these can have serious repercussions.
There are two types of emotions – negative and positive. I don’t let negative emotions affect me during trading or when I am making a trading strategy.
Negative emotions like anger, revenge, greed, self-doubt, fear, uncertainty, these really restrict people from thinking with an open mind. When you don’t let these emotions affect you, you don’t over-trade, and you are also able to make better strategies.
Empathy sounds like a good emotion although I can’t seem to see how that fits into trading?
Emotions are like poison in the trading career of any trader. No doubt we’re all humans and at some point of the time we get emotional and make decisions. This is exactly where you need to control yourself. Emotions such as greed, fear, anger, hope, panic, overconfidence, and impatience should be totally removed if you want to be a successful forex trader.
Emotions are pretty dangerous in trading as it can lead to losses. Having no emotions during trade is recommended as it will help you stay calm and make better decisions.
Euphoria mmmm maybe from over confidence from string of success or possible excitement seeking
Honestly, I think a trader should try to control any emotions when trading so the emotions wouldn’t affect the trade. They can be a liability during a trade.
Something that might be helpful:
On the other hand, if you are able to manage your expectations, you can easily alter your view of the market depending on what price action is telling you.
There’s nothing wrong with expecting the market to move to a certain level, what is deadly is when you are so stubborn to maintain your view even when price action is telling you otherwise.
Learn to let go of the things you cannot control (the market), and manage those things that you can (your expectations).
1 Like
Anger, envy, pride, greed and impatience. If you can truly avoid these, you’re set for life when it comes to forex.
1 Like