People who trade in Forex are not the same. They have different backgrounds, they have different stories and most importantly they have different emotions. When you think you would never cry if one of your friends dies, but in reality you never know when water come at the corner of your eyes. This emotion is what makes us humans but it is what makes us lose our money in the industry like currency trading market. This article will tell you the bad sides of decision that are taken on the spur of emotional moments. We know it is not possible for many traders to control their emotions as it is genetically coded in their nature and inherited by their parents, but with proper guidance and exercise, you can control it.
Emotions are often considered as the worst enemy of the Forex trader. The expert traders always suggest the new traders execute orders based on their trading strategy. If you don’t follow strict rules, it won’t take much time to lose your investment. Even if you lose many trades, you need to stick to your trading system. Follow the simple rule of money management and protect your investment. Instead of trading the lower time frame, focus on the daily or weekly time frame. It will help you execute better trades. Stop over trading the market as will make trading much harder. Keep things simple to make a consistent profit.
You are too blind to see what is in front of you
The first bad side of emotion is it makes you blind. It is not literally but emotionally and as a trader. Emotional traders may be best at their human qualities but when it comes to making a profit, they are not good. They do not see that it is obvious the industry will go down now. They have lost money in their last trades and they try hard to recover that money. They become emotionally involved and they do not consider the consequences. They place their trade and when they do it, they lost all of their money. If you want to know if you are an emotional trader or not, see if you are not seeing what other people are clearly seeing. This is one way to know if a trader is emotional in Forex. If you are emotional, control your emotions by trading in demo markets. Take a break from live trading and believe you will not fall back. It will help you to get yourself together and make more professional decisions when it comes to trading.
Turned out to be fueled by revenge
Traders do not get emotional for no reasons. There is some certain reason and the most common reason is they avenge the currency market. We know it sounds silly but it sounds serious to them. What would you do if some trades take all the money from you? These are some of the situations when you need to control your emotions. Most of the time, whatever the reason of the emotions may be, the decisions turned out to take avenge of the market. Remember you are not a character of a movie who has taken the oath to defend the account even at the expense of his life. Be patient and wait for your turn. You will get your chance to get back your money.
Cannot keep the winning profit
One of the bad sides of emotional decision n is you cannot keep the money that you have just won if you are emotional. If you have won one trade and you are feeling happy, you will place another trade with the same strategy and position size and this is where you will make the mistakes. The market is changing and the trade will turn out to be a loss. You will lose the money that you have just won. This is pretty common for the emotional traders.