Forex trading is not an easy thing. You have to know basics and learn trading psychology. there are several strategies for forex trading. The many management and controlling emotion is also important strategy to survive long time and make successful trading.
While the saying goes, “Trade what you see, not what you Wish to See,” many traders still trade what they would like to see happen. They keep chasing a trade with a false assurance that it will remain in a favorable direction for some more time. To trade forex effectively, sound decision-making is critical, and to be able to do that, traders must have the ability to control their emotions.
Let’s understand what kind of emotions forex traders usually experience:
Forex Trading: Positive Emotions
When a trade goes well and profits rake up in your account, you are bound to feel positive emotions such as exhilaration, ecstasy, or euphoria. You think clever as the market has confirmed your choice. So, you do have a reason to feel euphoric. However, many traders fall into the trap of this euphoric ride by allowing it to impair their judgment. They make themselves vulnerable by not being able to think objectively and pull out in time.
Forex Trading: Negative Emotions
Negative emotions include exasperation, frustration, anger, and distress. Intense negative emotional responses usually occur during the following circumstances:
- When a trade turns in the unfavorable direction
- When profit is not taken and the trade reverses, eliminating all the profits
- When a highly promising trade is missed
Traders must work off their negative emotions by finding a viable alternative to be able to think rationally. Many experienced traders say they just take a walk or spend time with their Play Station to get rid of the negative energy. When the mind is unclear, you are bound to make decisions that are not based on logic. So, say no to revenge trading.
Both negative and positive emotions have the potential to impact your forex trading decisions. Traders must have a strategy to get in and out of trades to be able to trade forex successfully.