Which One is More Harmful? Fear or Greed?

angelnish

Banned
Jul 24, 2012
29
1
0
Fear and Greed are two emotions that forex traders have to control. New forex traders have a lot of problems with these two emotions.

Greed is the first emotion that starts bugging. When someone just starts learning and trading forex and reads about the money that a trader can make through forex trading, he/she thinks about nothing but making a lot of money through forex trading. Unfortunately many new forex traders are not "lucky enough" and so they succeed to have some good trades in their demo accounts at the beginning and this makes them think about opening a live account and making real money. I call this bad luck, because as soon as they start trading their real money, they see the other side of forex trading and forex market. They lose and so greed will be replaced by fear.

For a long period of time they move between fear and greed. Sometimes they are fearful and sometimes they are greedy. When they have a losing trade, their fear show up and when they have a successful trade, their greed takes the control. When they are greedy, they are overconfident and so they click on the buy/sell buttons bravely and when they are fearful they have no confidence and so they just watch the market and don?t dare to take any position even when there is a good trade setup.

Most of the new traders give up at this stage and so they lose the chance of making money through forex trading for the rest of their lives.

But it really does not have to be ended like this. A new trader can easily pass this stage and become able to control his/her emotions, if he/she follows the below stages:

1. A new forex trader has to spend a few months on learning the forex market and forex trading basics.

2. Then he has to learn a trading technique and a trading system. This is an important stage, because if he tries to find and try a new system on the forums and different forex related websites, he has to spend his whole life in trying different systems and so he will never become a trader.The solution is finding a successful trader and asking him to share his trading system. The reason is that he has already tried that system and probably it is the system that he makes money with every month. So you know that it works. But if you want to find a system from the forums, you really don?t know if it will work or not. So you have to spend a lot of time in trying the system and it is highly possible that after a long time, you come to this conclusion that the system is not applicable for live trading. On the other hand, a professional and successful trader tells you everything about the pros and cons of his system and he will share the "do"s and "don't"s. So you do not repeat the same mistakes that he made when he was developing the system.

Therefore, instead of looking for systems on the forums, try to find a good trader and ask him to teach you. But make sure that he is a real trader because there are many people who introduce themselves as good and great traders, but they have never been profitable in reality. So be careful.

3. After finding a good and reliable trading system which is taught by an experienced forex trader, you need to try the trading system on the demo account at least for few months. You should forget that you are demo trading and you should treat your demo account as a live account. Only in this case you can built the confidence that you need for live trading. Otherwise you will do nothing but developing bad trading habits. When you succeed to trade profitably for few months consecutively, you can open a live account and start trading with a small amount of money. You need to rebuild your confidence with your live account and to do that, you have to trade with a small amount of money and when you succeed to trade profitably for few months, you can increase the amount of the money that you trade.

You are there

If you follow the above stages, you will see that fear and greed can never interfere in your trading, because you will not give them any chance to do this. Greed can not take the control, because you do not start with trading a lot of money and fear will not show up because you do not lose your confidence because of losing a lot of money.
 
  • Like
Reactions: sharabela

Fxpipper

Master Trader
Oct 26, 2011
1,132
3
49
I would have to go with greed and usually they are the reason for some of the biggest scams. As for fear, the only thing that leads to is inaction which is kind of a deadend where this market is concerned..
 

Master Forex IB

Active Trader
May 23, 2013
174
1
27
Greed or fear which is most dangerous it depends on they style a trader adopts .. If a trader is in hurry he can be effected by the greed very soon because he will try to get quick and high amount of profit at once. On the other hand for low confident traders fear is harmful they mostly close their trades at low loss and never wait for profit.
 

gerski

Trader
Nov 7, 2013
48
0
17
Both are harmful when present in us on our trading.Fear means that we are not that confident in our trading tendency is we may not be comfortable in doing our trade ,and greed makes us hunger for more profit which may lead to our lose in the end insted of gaining.
 

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
22
32
Canada
I would have to go with greed and usually they are the reason for some of the biggest scams. As for fear, the only thing that leads to is inaction which is kind of a deadend where this market is concerned..

I agree, but to an individual trader both are terrible and to me shows the inability of the individual to properly control their emotions. A little greed is good, a little fear is good but too much of either one is bad.
 

rrayne20009

Trader
Sep 13, 2013
57
3
17
Both are harmful but I think greed is more harmful.Fear could preserve your capital but you'll not earn because you're holding out on possible winnable trades while greed may totally blow your account out in an instant.
 
Aug 5, 2021
100
9
24
26
I think it depends. For me, fear was the worst because I would get anxious and pull out too early or hesitate to make moves I was confident about. I could see how one could get greedy as well, so I think personality plays a role in that.
 

e_abrams

Trader
Dec 11, 2020
313
24
19
38
I think both are equally harmful, as the way in which they cloud one's judgement is pretty much the same.
 

Dora_WalletInvestor

Active Trader
Aug 17, 2020
226
33
44
walletinvestor.com
I think it depends. For me, fear was the worst because I would get anxious and pull out too early or hesitate to make moves I was confident about. I could see how one could get greedy as well, so I think personality plays a role in that.
This is very true, I think fear and greed can be equally harmful just in different ways, and which you struggle with more really depends on your personality.
 

e_abrams

Trader
Dec 11, 2020
313
24
19
38
I completely agree. In my experience, being blinded by either one of these emotions - sometimes both at the same time - has led to serious mistakes.
 

sharabela

Active Trader
Oct 19, 2016
85
6
44
42
You are right on the note that these two are great enemies. If you give me an option to choose one from them. I would say for traders, fear is the worst enemy. I believe a trader with a solid trading strategy does not have an option to be greedy. Without a solid strategy a trader should not be called as a trader. On the other hand, a good trader with a proven strategy may not be able to execute his plan if he fears about losing money.
 

e_abrams

Trader
Dec 11, 2020
313
24
19
38
I don't know. Does it matter whether you closed a position too early because you were afraid to keep it open, or too late because you kept it open because you were greedy? You lose money either way.
 

e_abrams

Trader
Dec 11, 2020
313
24
19
38
I think you are underestimating how complex people's emotions can be. Everyone feels greed and fear at the same time, it just depends on the person and the situation they are in which one of those would be dominant.
 

e_abrams

Trader
Dec 11, 2020
313
24
19
38
In other words, the best thing a trader can do is to seek to trade with a clear, unbiased mind. Which sounds easy in theory but is not at all easy in practice.
 

sunar14

Trader
Jan 17, 2021
57
4
9
27
Avoid result-oriented thinking, i.e. making conclusions about your trading strategy from single trades, because viability of your trading strategy can be only assessed after you made many trades.
 

e_abrams

Trader
Dec 11, 2020
313
24
19
38
True. Try the same strategy under different circumstances too - during different trading sessions, during high volatility and low volatility, etc.
 

Dora_WalletInvestor

Active Trader
Aug 17, 2020
226
33
44
walletinvestor.com
I don't know. Does it matter whether you closed a position too early because you were afraid to keep it open, or too late because you kept it open because you were greedy? You lose money either way.
In terms of direct consequences, maybe it doesn't matter, but it's good to know which one happens more often, because that shows you what you need to work on and improve.
 
  • Like
Reactions: e_abrams

louisejames

Newbie
Jul 14, 2021
17
2
4
31
I agree that greed is the first emotion that every trader feels when they think of starting trading. because they heard the success stories of traders and how much profit they gained from trading. So, undoubtedly, the feeling of greed emerges. But, to become a successful trader, it is very important to control your emotions and only think about market movements and analysis.