Emotions will always accompany traders from all over the world simply because this is human nature and emotions are built into it, whether you like it or not. And no matter how advanced technological innovation has been, for as long as we remember, emotions always get in a way of human rationale. Even most experienced traders have a hard time ignoring the emotions when trading. No matter how simple forex trading may be as to the basic mechanics most forex traders make frequent mistakes that cost them money. The reason is that human emotions often get in the way of common sense and judgment.
If you cannot accept the fact that you may have been wrong on a particular trade, you will find it hard to close out of a losing position. Instead, your mind will find ways to convince itself that you may yet be proven correct and the trade may swing around and be profitable. There is a risk that subconsciously, you will see evidence that supports what you want the trade to do while becoming blind to evidence that suggests you are wrong.
A loss never feels good. It can make you emotional and irrational, tempting you to make kneejerk follow-up trades that are outside your trading plan. No trader makes a great trade every time. It may sound like a bit of a cliche but the old adage “When we fail to plan, we plan to fail” is so true in trading. Accept that losses are part of the reality of trading and stick to your plan. In the long run, your trading plan should compensate for that loss; if not, review your plan and adjust.
One of the major differences between beginners and those who have learned to become successful traders in the long term is that the more experienced traders repeat these mistakes like this less often. They have learned to recognize their own weaknesses and where they are most likely to go wrong so know how to avoid repeating the errors so often. Even then though, even very experienced traders can still fall into the traps that the market sets for them every now and then.
The best way to deal with emotions while trading consists of eliminating them. While this may be easier said than done, it makes up the main reason to trade with a clear and concise trading plan. Trading with a trading plan can eliminate the major pitfall of getting emotional while trading. Having clear rules and an easy to implement a trading plan can also save both novice and experienced traders from making many other potentially costly trading mistakes.
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