In our everyday lives emotions are great. They make it possible for us to enjoy life and create lasting relationships with other human beings. In fact many argue that our complex emotional abilities are part of what makes human. Emotions are great but there are times when having them are more of a burden than a blessing. Trading is one of those times.
Guest post from visionsofaffluence.com
You see the reason why emotions are bad for trading is because they cause us to make bad decisions. I want you to imagine this scene, a trader opens up a trade and immediately it moves in her direction, things are going great and she feels like the next George Soros. Price reaches her take profit point but she just knows that it’s going to keep going and she doesn’t want to miss out on the profits. So she stays in even though her analysis tells her otherwise because she knows its going moving and make her more money.
Then all of a sudden the trade starts to move against her and some of her profits are lost, but she doesn’t close the trade because she wants to at least get out with the profits that she lost. And even though price didn’t move past her take profit but she just knows that it will go back and retest it. So she stays in and waits for price to go back to her original take profit, but that never happens and she ends up closing the trade for a loss.
Now why did this trader let a winning trade turn into a loser? It’s because she let her emotions make decisions. Her emotions told her to stay in a trade even though it was at her take profit, and it was her emotions that kept her in the trade even after it started moving against her, and it was her emotions that caused her to take that loss.
So, if you want to become a successful trader you have to learn to control your emotions and always stick to your trading plan. If not then you will never amount to anything as a trader and you might as well give it up now.
Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..
Share
