From my own personal experience I have been negatively impacted by both greed and impatience but impatience is the one I have the most problems with, even now… What about you?
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Good question.
Patience is my weakness too, but I’ve improved significantly over the past few years.
To answer your question, I would say greed can cause the most problems. Greed will clean out your account, whereas lack of patience is more of a hindrance.
I will be interested to hear other opinions on this.
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Greed for me also. I think greed causes me to lose money because I remove SLs or adjust TPs etc. Impatience usually for me means cutting winners too soon. Still just as bad but not as detrimental as what greed causes one to do.
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Both greed and impatience are emotional challenges that needs to be managed. And that’s not easy, because FX trading is not suitable for humans who have evolved to avoid pain at all costs.
They would rather nurse a losing trade then close it in the hope that it will revert back in their favour. Winning trades are even more complicated in that the price action doesn’t move fast enough in their direction, or when it does let it run into a brickwall and fall over.
And then there’s the news which causes immediate rallies, and everyone wants to get on the action before it burns out. Overtrading is common, as is revenge trading.
So what is the solution?
It’s recognising the emotional signal when it arrives and learning how to deal with it, so it becomes a part of the process. After I have placed a trade, I leave well alone by switching off and letting it run overnight if need be, and see the outcome first thing next morning.
This imperfect management won’t create huge profits nor huge losses, and as long it’s profitable overall, it’s my slow grind to ultimate success. Beware of setting money targets, always act in percentage terms, aim for the probability being on the right side, and patience and discipline will become part of the process. That’s why I have had six consecutive green months, even on a less than 50% win rate.
Good luck.
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In the trading context I don’t regard either greed or impatience as emotions. Emotions are unjustified states of mind which drive behaviour and behavioural decisions. I see greed and impatience as behaviours driven by an underlying emotion. The emotion driving both in trading is fear.
I like this. All very actionable!
And after that essay I am still left wondering which of the two you think is worse, smh.
Started out being Greed… A few lost accounts in the early days removes that emotion quick smart as you hang on by the skin of your teeth just trying to break even…
Then a few months later… Impatience rears it’s ugly head as you believe if your not in the market you won’t be making any money…
A few years later… When you finally work out which way is up… Greed is still present… But Risk/Reward is constantly wrestling to keep it in check… And a thoroughly back tested profitable trading Strategy should be able to keep impatience at bay…
The need to be constantly in the market is strong for full time traders… So Greed and Impatience are never far away.
Although… These days I can walk away from trading for days, sometimes weeks at a time…
Impatience…
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I feel you…Totally.
[quote=“steve369, post:4, topic:809248”]
Both greed and impatience are emotional challenges that needs to be managed. There is no distinction.
IMO, risk reward ratio is overrated. All that matters is finding a probability of being on the right side for as long as feasible given the market conditions. As long as I make a profit, I’m not overly concerned about placing S/L & TP providing there is a genuine rationale, like an appoaching S&R zone.
Which could, and has meant at times, that my RRR is slightly less than 1:1. And which means I could place a wider insurance S/L because my process is designed to reach my profit first - as in a trend.
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I totally agree… I don’t use RR in my trading… I don’t use Stop Losses either. I use custom Indicator levels to open and close trades which I have posted about ad nauseam in these forums… Which no one bothers to read before commenting…
I will not suggest new traders, trade like I do… I only suggest they demo various Risk Management concepts that I demonstrate in these beginner forums…
BTW… @steve369 , where did I mention RRR’s in this thread?? I typed Risk/Reward… Meaning the more profit you go for, the larger the lot size, the bigger the account the larger the risks involved… Nothing to do with Ratio’s… Nothing to do with TP’s or SL’s…
You can have All the Money Management, All the Risk Management, you can even apply All the theories and trading concepts you like… If your Strategy isn’t profitable and you don’t have a genuine edge… You won’t last long in these Markets.
I fear we have another waffle fest on our hands…
TWB - the indicator between Risk**/**Reward is a mathematical correlation that represents a Ratio between the two, which you have demonstrated appropriately by your example. Which is exactly what RRR was mathmatically designed for, in concise termanology. Whether you follow or not, using R/R or RRR is also using P/L & TP.
Yep, confirmed… We have another waffle fest on our hands…
@steve369 … I’ll translate it into simple… A few years into this game… You realise that opening a $30k account and trading big is extremely hazardous to your funds… So you open smaller accounts and concentrate on developing your strategy… Without a profitable strategy, every opened position is exposing your accounts to risk… No matter the size of your accounts.
Once you have developed a profitable strategy and can trade it with discipline, you should be able dispel the impatience of entering and exiting positions when the edge is against you.
No ratio’s, no TP’s and SL’s, no mathematics… Just plain prudential uncommon sense.
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So true ,how many times traders have to hit their targets and only a few pips away,then the trade to go in the opposite direction and hit the stop.Its not so much greed but looking for perfection which regarding trading is ridiculous.
My strategy is profitable. If the edge is against me, I do not open a trade. I aim for high probabilities of being on the right side and take it from there. My Daily risk for open trades is a maximum 5%.
Greed and impatience is long past, now. Discipline and patience are key criteria. I just follow the same process every day when a suitable trade is identified, and reviewed, and accepted.
Onward and upward. Best wishes for the future.
What does that mean?
My aim is to find probabilities of being on the right side of the trade, and I have very strict process rules. If any rule is not in accord, it is possible that the edge could be against me. Edges are what every successful trader has to remain profitable.
A typical example was yesterday (Friday) when I held back on a USD/CAD buying opportunity and a EUR/NZD selling opportunity. At 08.30 London opening time, only one of my supporting signals indicated a contrarian probabilty on both those trades. I decided to leave well alone. Good thing too, as reviewing the charts this morning, the probable outcome would have been two losses.
Discipline and patience could be an edge, as could a strategy or great emotional control, or any other means of landing up on the right side of a trade at closure.
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Greed and impatience… I see both as great challenges in trading. Greed can be in terms of moving your SL or TP, which can be controlled by being contented with your products and setting a particularly R:R that suits you.
Impatience can be in terms of entering too early, holding on to a losing trade or closing a winner early… I’ve been most affected by the consequences of impatience, still working to get better though…
But I believe a remedy should be to stick with ones plan, rigid plan, wait for setup to play out according to ones analysis and trading system/strategy i.e. if you have back tested your strategy and are comfortable with the winning % of the system…
Just my little contribution tho…
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You mentioning revenge trading hit a button. How much time in a day do you spend on trading?