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Avoid emotional trading


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Avoid emotional trading

Trading psychology describes how a trader handles generating gains and handling losses. It represents their ability to deal with risks and not deviate from their trading plan. The emotional aspects of investing will attempt to dictate your every transaction, and your ability to handle your emotions is part of your trading psychology.

It is impossible to eliminate emotions in trading, but this should not be the goal in the first place. Instead, traders should understand how certain biases or emotions can affect their trading and use this information to their advantage. Every trader is different, and there is no simple rulebook that everyone should follow.

Identify your personality traits

Develop and follow a trading plan

Have patience

Be adaptive

Take a break after a loss

Accept your winnings

Keep a trading log

Identify your personality traits

One of the keys to developing successful trading psychology is identifying your personality traits early on. You will need to be honest with yourself and say if you have impulsive tendencies or if you are prone to acting out of anger or frustration.

If this is the case, it is important to keep these traits in check while you are actively trading because they can lead you to make rash and ill-advised decisions that have little analytical backing. However, it is also important to play to your personal strengths. For instance, if you are naturally calm and calculated, you can take advantage of these personality traits during your time on the markets.

Equally as important as identifying and being aware of your personality traits and emotions is recognising your biases, as listed above. Biases are an innate aspect of human nature, but you should be aware of what your individual biases are before opening or closing any trades.

Develop and follow a trading plan

Having a trading plan is paramount to ensuring that you achieve your goals. A trading plan acts as the blueprint to your trading, and it should highlight your time commitments, your available trading funds, your risk-reward ratio and a trading strategy that you feel comfortable with.

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For instance, a trading plan could say that you were going to commit one hour every morning and evening to trading, and that you will never commit more than 2% of the total value of your portfolio to any one trade. This can help minimise losses and limit the effect of emotions on your trading as the rules for opening or closing a position are already highlighted for you.

Trading plans should also take into account individual factors that could affect your trading discipline such as your emotions, biases and personality traits. If you make clear what your biases are before you start trading, you might be less inclined to act on them.

Have patience

Patience is integral to discipline and it is crucial that you have patience with your positions. Acting on emotions like fear can lead you to miss out on a profit by closing a position too early. Trust your analysis and remain patient and disciplined. Equally, when looking to enter a trade, it is important to be patient and wait for the opportune moment rather than just jumping into a trade right then and there.

For instance, if you were wanting to speculate on some GBP currency pairs like EUR/GBP or GBP/USD, you may want to wait until just before a Bank of England (BoE) announcement as there tends to be increased volatility at this time.

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Be adaptive

While it is important to have a trading plan, remember that no two days on the markets are the same, and winning streaks don’t exist in trading. With this in mind, you should become comfortable in assessing how the markets are different from day to day and adapt accordingly.

If there is more volatility on one day compared to the day before and the markets are moving particularly unpredictably, you may decide to put your trading activity on hold until you’re sure you understand what is happening. Being adaptive can help to limit your emotions and rule out representative and status quo biases, enabling you to assess each situation on its own merits – ensuring that you are pragmatic during your time on the markets.

Take a break after a loss

Sometimes after a loss, the best thing you can do is walk away from your trading account for a short while to gather your thoughts and compose yourself – rather than rushing into another trade in an attempt to regain some of your losses.

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The best traders are those that take their losses and use them as learning opportunities. They will typically take a few minutes to themselves before going back to their platform, using this time to assess what went wrong for that particular trade in the hope that they might avoid making the same mistake in the future.

In doing so, they keep emotions like pride or fear in check by letting themselves cool off before approaching the next trade with a clear head and sound judgment.

https://www.gold-pattern.com/en 

 

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Your daily profit won’t be same and you shouldn’t get tensed about it more. So, you should nurture a jolly mind and earn knowledge more and more. Otherwise, you won’t find satisfaction even if you earn millions of dollars. Eurotrader allows all investors with a whopping 111% deposit bonus.

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It is not an easy thing to make a profit in forex, where here there is also a very big risk. So pay attention to the management and also the ability to continue to develop, so that in the future it can be better and consistently make profits with the Tickmill broker.

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All the traders we have a choice of the broker to be used , should the trader can choose a broker which is more appropriate to the concept of trading that will be used , if you love doing scalping should choose the broker that allows trading concept such as this. Otherwise it will be more difficult to survive, basically in spite of a profitable trading approach scalping don’t allow by and large regulated trading platforms in their trading brokers.
 

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  • 4 weeks later...

Try to trade scalping with such a broker that provides you smart bridge technology because it helps you earn profit quickly. Lacking of scalping-friendly broker makes it difficult for a trader. However, don’t open a trade based on your wild guesses. Eurotrader is the best trading broker for scalpers because they use smart bridge technology and updated trading platform.

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  • 1 month later...

Emotion will never bring benefit to you. You can enjoy your scalping when you have a reliable trading broker that offers you a technical error-free platform where you will face no technical errors. Advanced technology-using brokers are highly needed for better trading experience. Eurotrader provides a reliable trading platform to traders.

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Emotions are indeed very influential in forex, as a trader you have to keep your emotions under control as much as possible and also have analytical skills, so that trading is more comfortable and focused on achieving consistent profits with the Tickmill broker.

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Lot of traders have Emotional forex trading issue:
Just follow these simple rules:

Rule 1.  Create Personal Rules

Rule 2. Trade the Right Market Conditions

Rule 3. Lower Your Trade Size

Rule 4. Establish a Trading Plan and Trading Journal

Rule 5. Relax!

 

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Emotion is your enemy. Newbie traders prefer buying paid courses at their first attempt but I am not in favor of this decision because easy internet availability has made it easier for us to strengthen our basics.Eurotraderprovides free educational program and a demo account for traders’ learning.

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It is essential to pay close attention to emotions and control them as best as possible. Because keeping emotions under control is very difficult, that's why I try to control it to the best of my ability at Tickmill, to ensure that I can carry out trades comfortably and safely.

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  • 9 months later...
  • 1 month later...

Risk management strategy is a tool that must be maintained in trading to gain profit. Towering leverage and trading in standard account will carry massive amount of risk for you. So, avoid trading with high risk as it consumes your capital. Stay careful about broker choosing. FXOpulence is a secure broker allowing traders to trade fiats, crypto and synthetic indices at a narrow trading spread.

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Forex trading indeed comes with very high risks, but they are proportional to the potential for significant profits. That's why it's crucial to pay attention to risk management and continuously develop skills, ensuring a solid understanding and readiness to trade on a real account with Tickmill as the broker.

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  • 8 months later...

Trading psychology is crucial for success, influencing how traders manage gains and losses. Understanding personal traits, developing a solid trading plan, exercising patience, and adapting to market conditions can enhance discipline. Taking breaks after losses helps maintain clarity, turning setbacks into learning opportunities and improving overall trading effectiveness. LQDFX’s PAMM trading service can be a significant choice to neophyte traders and their reliable VPS will help you enjoy secure trading environment.

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