Common Emotional Weakness of Forex traders
Forex traders are Human. They have emotional feelings like we all do. But these emotional weakness of Forex traders have a number of weaknesses of Forex traders will certainly ruin their trading life! The foremost of them are Greed, Fear, Ego, Addiction, and Laziness. Let’s have detailed look:
For Forex traders, one of the seven deadly sins is greed! it is the main cause why traders lose in Forex. Because of our short lifespan and eagerness to make money fast, greed leads us to trade without first taking the time to build up the requisite knowledge and experience of the markets. Greed forces us into the market too soon when we are unready. Greed also makes us more aggressive, causing us to over-trade or over-leverage, which in turn causes us to trade our account into oblivion.
Fear doesn’t always mean negative emotional feeling! Healthy fear is to know that the markets are dangerous and that we first need the requisite skills and training to survive in them. Unhealthy fear is to think that the market is so dangerous that it is paralyzing for us to initiate trades, causing us to watch the market action without being part of it. Unhealthy fear is also when a trader puts in a big order because of greed, and then when the market moves against him, he cuts the trade at a loss too early, fearing a bigger loss yet never allowing the trade room to breathe. Or if the market moves in his direction, he closes the trade too fast with small profits, fearing that the market might move against him yet never allowing the trade room to mature.
Ego can ruin your life not only in Forex trading, but also in every business that you have a plan to start in the future! Ego is when any amount of knowledge or experience goes to inflate the head into thinking it knows enough or all there is to know. Many traders lose because they don’t have the remotest idea of what they are doing when at the same time they think they really know. If their ego is big enough and they keep on trading the markets and losing, they may even think that their “experience” qualifies them to write books, create seminars and become “gurus” to those newbies naive enough to trust in their confidence.
Do not be addicted to Forex trading! If you watch charts all day without a break, that means you are impatient to place a trade! when you trade with vengeance when you lose, when you are unable to accept a loss keeping losing trades open for days and weeks or adding more money to your account (and even adding to the losing trades) in the hope that it will switch direction. You must remember that trading is not a betting game to make money fast. It is a business to make money slowly and you must put in the time and effort to become a good trader.
Scientists have proved that most people never use the full potential of their brains, not even 25%. Our brains are more powerful than the most powerful of computers, but it requires work and motivation to flip them on. It is too easy for us to glide through life at low brain output, living in the illusions of the past or future, but unable to fully compute the present and question everything around us. Lazy traders hardly ever do their homework before trading, to research the right setup and the important news of the day, and never do their homework after trading, to analyze their past trades and learn from their mistakes. Instead their trades are begotten from luck, they end up failing, and there is nothing learned from their trading errors. After failing all the time, they then put all their hopes in a trading robot to trade for them, without putting in the massive effort and testing it takes to distinguish the few good robots from the majority of bad ones.
Ho to get rid of Emotional Weakness of Forex traders
No, let’s discuss how can you get rid of these emotional issues. Go through the following steps and give yourself the greatest opportunity to achieve your goals.
1. Have Faith in Yourself
No matter what happens, always believe in yourself! To reach the level of elite Forex trader, you must trust in yourself and your Forex trading education. You must be willing to make all your trading decisions, instead of relying on someone else’s thoughts or ability (or lack of). Of course, you will prepare yourself fully before every risking any money.
2. Accept Your Learning Curve
It is obvious that if you are not a veteran trader, you will lose money trading the Forex market. This is a near certainty. I don’t say this to talk you out of trading. In fact, quite the opposite scenario is seen! You will be trading against others that fall to this reality day in and day out. You, however, will not risk a dime until you have learned the skills you need to make money trading the Forex.
3. Decide What Type of Trader You Are
You have to choose the type of trading life that suits you most! There are many ways to trade the Forex. They range from very active to very patient. You must decide which style suits you best. The best time to learn this about yourself is while you are trading a demo account. There is no need to allow your learning curve to cost you money.
4. Get Educated
While there is no short cut way to Forex trading success, education is the shortest path to elite Forex trading. Regardless of your ultimate goals, you will reach them quicker with a great Forex trading education. Take some time to review different options before deciding on whom to trust with your Forex trading education needs. A Forex seminar will help shorten your learning curve drastically.
5. Continue to Get Educated
Learning Forex is a continuous process. Even the most successful traders are still studying on it and try to learn something new every day! In order to achieve and retain elite Forex trading skills, you must constantly be adding to you knowledge base. Your education should never end. In fact, one of the key points to look for in an elite Forex trading course is ongoing education. It’s nice to have an ongoing relationship with the person/people helping you to achieve your goals.
The bottom Line: Emotional Weakness of Forex traders
The elite Forex traders has a strong desire to reach goal and they have ability to be independent. If you have a desire to join their party, you must behave like then! Many traders are willing to follow signals, systems, strategies, or anything else you may call them. By taking this approach, however, these traders are only as good as the people they follow.
An elite Forex trader will lead. Their decisions will be calculated and analyzed to near perfection. They will make decisions with no hesitation, and handle the growth of their account in a predetermined, intelligent fashion. Take your trading to their level and you will never look back.
The Bottom Line:
Don’t forget that emotional weakness is not the only reason for Forex trading failure. Sometimes a trader may suffer from a loss because of unfavorable conditions of Forex Broker. So, Choosing Forex broker wisely is a vital task for every trader. So, we would like to recommend you to start trading with HYCM Broker who has friendly trading conditions for traders. Read more from HYCM Broker review.
|Chapter 10||Trade Psychology|
|Lesson 1||What is Trade Psychology|
|Lesson 2||Common Reason for Forex Trading failure|
|Lesson 3||Forex Trading winning mentality|
|Lesson 4||Emotional Weakness of Forex traders|