Trading And Emotions

Fear and greed kill your profits, and that’s a fact. This is the reason why people buy things when they are expensive and sell them when they get cheap. It may sound illogical, but this is what happens every time an economic bubble is created and then busted. Guess who gets the profits?

The same thing also happens in FOREX trading. The majority of so called “traders” just fail to exit the market at the right time, because… They are either afraid to take a planned loss and exit the loosing position, or they fail to exit the winning position at the planned target point.

Some people hope that the market should turn around and the loosing position will be closed with zero, and in some cases it does happen but often they end up with a much greater loss than they have originally anticipated.

The same thing with profit too. A winning position is either closed too early on fear of profit loss, or too late on greed. In both cases a big chunk of profit is usually lost. If you regularly increase your losses and decrease your profits, your winning strategy turns into a loosing one.

To remove emotions from trading, you need to have a trading strategy. You must have well defined rules of closing loosing and winning position, and you have to follow them no matter what. There are different types of strategies, and some strategies allow a trader to enter the market based on intuition, but once this trader opens a positions, the exit rules immediately take effect.

If you want to learn more on how a winning strategy lets you overcome emotions, watch my video tutorial by clicking on the button below.

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