Emotions And Forex Trading Don't Mix

[Samuel23]

Agree with you bestforex. By making necessary arrangement and tasks in forex we can certainly match out expectation and will surely make big out of it. You shared something relevant and i will encouraged other to follow these step to begin your progress in this market. However, emotion will be needed as it will be positive - means happiness )

[Samuel23]

No one is perfect nor can be a system. However, we can try to make something to the perfection. There are no harm in trying!! In Forex it is like that, we should do the best to win and for that we need some good knowledge about it.

[Kathia]

Hi Samuel,
I feel that if you follow your money management plan, your trading plan and your system, the only emotion you will have is happiness  Trade your plan and rules and you have done your best?
On a serious note, yes we are human and it is difficult to be so disciplined. However, trading is a serious activity when it involves real money (unless one is playing for fun).
New traders often ignore the psychological warning that comes with trading and think they will be able to control it only to find themselves with no plan and no direction, jumping into trades and increasing their lot size till they have the ultimate loss that leads to a disaster.
Trading involves a combination of sticking to your rules/plan (following your strategy consistently), money management and psychology.
‘’Going with your gut’’, mad as it may sound, can sometimes help if we tip it on its head. Did you ever enter a trade you that matched all your trading rules and analysis, yet have a ‘’feeling’’ something wasn’t quite right, only later to find out your ‘’gut feeling’’ was correct? Those are the trades I try to stay out of. At least until I see another confirming signal and my ‘’gut feeling’’ says ‘’enter’’.
Kathia

[Samuel23]

Really nice post Kathia, i was amaze by reading it and it give lots of good advice and nice analysis. We should always do our plan and create rules to trade forex. I totally agree that Money Management and good strategies is important in the market as we should know how to control our money and when to "Enter" the market for trading. However, gut is something that i will say is from my ego and i would rather avoid in my trades. Gut is something that we need to have but it surely leads to higher risks with a WIN or LOSE situation. But if this is helping you in forex, its good. )

[fx_eanderson]

To be honest, a good trader can evaluate if he involves his emotions into trading or not. People who are impulsive and ruled by emotions, be it even good traders, put all their knowledge in an EA and run it safely as means of risk management and of protecting their investment from themselves.

James Jonathan
Forex Trading|Forex Blog

[Fxpipper]

Sorry, would have to disagree with the last post for the simple reason most professional traders do not trust EA's for the simple reason they do not make money in the long term. In other words, you need to learn how to trade manually, sans any impulsive decisions..

[angelnish]

Someday you will have that great feeling of being a great trader. Let's define what a great trader is: a great trader is a person who can approach to the market unbiased even though he or she is desperate for an entry point. A great trader is someone who do as systems doers to do and trust more in system itself than guts, no matter the situation, no matter how trader feel, as a last resort trader decides not to trade if not feeling good, there will be more opportunities anyway. A great trader i the one who can trade on a demo or live account without telling a difference, in fact a great trader is more careful with the demo.

A great trader is a person who practice emotional control all day long, inside and outside of FX. The great trader realizes that emotions comes and goes, and just accept it like it was a chronic disease the trader must carry with, the great trader accept the fact it will be an everyday struggle, cannot be happy forever.

Now we have clear what a great trader is, i can tell when you reach that stage it is a great feeling, sometimes i look back and i wonder why in hell i did not do those days the stuff i do today, it would spared me a lot of troubles and painful pain. Once you reach that stage you will see everything in different ways that you used to do, you will think in everything and will care about everything without even having an idea. Your brain will star thinking so fast that things just happens in slow motion around you and the most weird thing is you will forget the main reason why you did get into this crazy thing called forex, you will forget about money itself, did I mentioned money in my definition of the Great Trader? No. So is an ironic thing, in forex to make money you must forget about it.

[Fxpipper]

I will have to second angel's post - on the "ignore gut" part, a few traders will swear from here all the way to Alice Springs that trading on gut feeling is the way about it. Sorry, but emotions and forex trading does not mix, it is more like oil and water..

[Easy Trader]

I think decision making off of a "gut feeling" in trading is a tricky deal. The trader must be honest with themselves as to what there trading level is. What is "your gut feeling" based on more or less. I personally do make trade managment decisions based on "my gut" fairly often, but I know my gut feelings are built off of a foundation of trading one strategy for years that I know is accurate. As the market moves I can adapt with it drawing off of past experience. If a trader doesn't posess this than their "gut feeling" is really just plain old hope, there gut and psycology are driven off of emotion not experience. It all comes back to whether you have an approach that work or doesn't plain and simple. So for the novice trader Fxpipper is spot on and trading with "gut" (masked hope) will always be oil and water. Fxpipper your the man! I enjoy your comments dude! So as a trader I needed to be honest, do I have something that works or am I still in the process of finding something that works. How ever long that takes the more honest the better the chances of eventually finding a system/strategy/approach that is truely profitable. Trading psycology is the same thing. If a trader doesn't have something that works then of course they will be all over the board psycologically, its a pain in the ass and stressful endlessly trying strategy after strategy that avails no success. But honesty will ground the trader and give them a clear mind as to when to cut a system loose and try another one. When a trader has a working approach emotion is no longer remotely an issue. There is no special dance or chant or ritual to trade better you just sit your ass down and trade. You are either in the act of hunting for something that works or perfecting something that you know does. But as soon as a trader starts lieing to themselves about where they are truely at experience wise is when psyc/emotion start eating away at any progress made. We start renaming hope as gut and blame our psycology instead of lack of experience which leads to a lack of patience. We make a huge deal of our psycology, we try to invent new money managment, we accuse brokers of hunting our stop's, we then look for EA's and eventually submit to signal providers. In this state we vastly diminish our chances of ever spotting a successful way to trade even if it was handed to us. In the states we have a saying "there is no such thing as a free lunch!" you have to earn it, it takes a great passion and dedication to figure this business out. You either have something that works or are looking for it, thats all the psycology that is needed. My rant and my 2 cents.

[Fxpipper]

Ha, knew someone would post on the "gut feeling" - the weird part, I agree with you on principle - regarding the gut part. But most newbies, tend to think on their gut and the rest you know. So, if you are new to Fx, would suggest you avoid any thoughts about your gut or what you ate and just concentrate on what you learn here and at other online resource centers..try to be logical, do the research and analyze your trades.