What exactly are the Symptoms of Emotional Trading?
I think - it is about trading by real money.
I know just 2 factors:
1. "I am affraid to lose"
and
2. "I want to trade"
Just some explanation about why it is simptoms of emotions:
About item 1. Losses are part of this "game" (forex). And experienced traders (when they are looking for good trading system) are asking "when can I lose and why" more than "how can I win and why". They understand that losses are part of forex.
But traders under emotions can not control this situation by themselves.
About "I want to trade". The trader under emotion can not strictly follow the rules of his system. He feels that he must trade right now, irrespective off ...
Because he can not resist with the situatiion when someone is making the profit with some system but he is waiting for good signal on the same time.
When you don't set a stoploss hoping the market obey your dreams. HOPE
When the trade makes some pips and your heart starts beat harder to close the trade. FEAR
Whenever you trade without plan your are emotional trader trading the hope and fear.
Hi to all,
I have been reading about emotional trading and why it is so nasty, but I am not clear what the symptoms of it are. So what are the feelings you have when you’re under emotional trading?
I read somewhere once that 95% of all Forex traders lose 100% of their money. How true those words seem.
Letting emotions creep into trading is not profitable.
I have a theory about trading that I would guess nearly everyone goes through at one time or another. It goes like this:
"The Seven phases of the beginning forex trader"
It all starts with No 1. Conservatism - after all the trader has read, he/she approaches each trade with tight stops and predefined limits just like the articles and books said. Then comes No. 2. Success - Good, well thought out trades bring profits, so quickly! Much better than I thought. Which leads to No. 3. Overconfidence - This trading method works every time, I am a genius. I am the best trader in the world. Of course that leads to No. 4. Greed - If I can make this much with one lot, then I can make twice as much with 2 lots. but all of a sudden there is No. 5. Denial - That's ok, the price will come back down, it always does. The top of the fibo is just above it, don't worry. No reason to close it now. Next is No. 6. Panic - No No No, it has to come down, I can't close now, look at how much I will lose. The balance is still up, It is not a loss if I do not close. And finally, my absolute favorite No. 7. Despair Margin call, what is a margin call?, what happened to my positions? its all gone, its all gone....
I think a lot of us here turn to programming to remove the emotion from the equation. The EA doesn't care what the price is, it just does what it is told in the code.
I read somewhere once that 95% of all Forex traders lose 100% of their money. How true those words seem.
Letting emotions creep into trading is not profitable.
I have a theory about trading that I would guess nearly everyone goes through at one time or another. It goes like this:
"The Seven phases of the beginning forex trader"
It all starts with No 1. Conservatism - after all the trader has read, he/she approaches each trade with tight stops and predefined limits just like the articles and books said. Then comes No. 2. Success - Good, well thought out trades bring profits, so quickly! Much better than I thought. Which leads to No. 3. Overconfidence - This trading method works every time, I am a genius. I am the best trader in the world. Of course that leads to No. 4. Greed - If I can make this much with one lot, then I can make twice as much with 2 lots. but all of a sudden there is No. 5. Denial - That's ok, the price will come back down, it always does. The top of the fibo is just above it, don't worry. No reason to close it now. Next is No. 6. Panic - No No No, it has to come down, I can't close now, look at how much I will lose. The balance is still up, It is not a loss if I do not close. And finally, my absolute favorite No. 7. Despair Margin call, what is a margin call?, what happened to my positions? its all gone, its all gone....
I think a lot of us here turn to programming to remove the emotion from the equation. The EA doesn't care what the price is, it just does what it is told in the code.
there are only two emotions:
1. Greed to make more money
2. Fear to loose money
Both are really bad, so I better robot with no feelings. :)
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I have been reading about emotional trading and why it is so nasty, but I am not clear what the symptoms of it are. So what are the feelings you have when you’re under emotional trading?