Fear, disappointment, nervousness, greed, and overconfidence are all emotions to avoid when trading. It is also imperative to understand that these negative emotions have a negative impact not only on our trading but also on our health.
The way that traders control their emotions in their trading impacts whether or not they can be profitable in the long run. Emotions are without a doubt among the most influential variables for traders. Try to stay away from anxiety, greed, and excessive trading.
Whatever the emotions, it is important to be able to control them. I think everyone should understand the outcomes if you do not control yourself and your emotions.
Emotions really hamper the overall trading direction of a trader and one should know how to control their emotions while trading because lack of control can have a bad impact on oneās trade.
When you intend to abandon a trade, greed may force you to continue in it in an effort to reap a small profit. When you think you are winning, such trades run the danger of failing. Based on prior performance, use your trading notebook to determine the optimum exit points.
Anxiety can be a clue that something is awry if you donāt feel secure in your open trade. Being overly tense could mean that the position is too large or that you lack confidence in your own market analysis.
Here are some emotions to avoid during trading forex -
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Fear -
Both the fear of losing money, which causes traders to close winning deals too soon, and the fear of giving back earnings, which causes traders to delay releasing losses, which results in much larger losses. -
Greed -
Traders who are motivated by greed frequently disregard sensible risk and money management guidelines. It can also encourage excessive trading by insisting on a gambling mindset. -
Frustration/Anger -
Revenge-trading and other undesirable behaviours are brought on by frustration, which also makes the challenges a trader faces worse. -
Anxiousness -
Anxiety is a red flag that something went wrong. It is frequently a warning that your position is too large, you breached your rules, or you shouldnāt be in that trade if you are extremely worried while you are in a trade. Not controlling your anxiety can make you question yourself even with the right trading decisions.
Negative emotions can make a trader lose easily. Certain emotions like greed, anger, and anxiety can ruin oneās trading. Greed can result in overtrading, and anger can result in perceiving the situation negatively, which impacts oneās trading.
Negative emotions are a result of ānot preparing wellā psychologically. If you face negative emotions like greed, anxiety, fear, or frustration, it means that you have not prepared yourself well to face the challenges the market might offer you. And as humans, we will be emotional at times, but we can always control our emotions and that is what we need to understand.
I usually try to avoid greed and laziness while trading.
I feel greed and frustration should be avoided the most while trading.
Ooh laziness! Thatās one thatās not usually mentioned. How does that appear when you trade? Like you donāt feel like checking charts or reading the news? Or just donāt feel like trading at all perhaps?
Excess of everything is bad.
Whether itās fear, excitement, anger, greed or anything, when you have it in excess it always proves detrimental for trading.
We should avoid greed and disappointments while trading because they can impact our trading performance.