If you have been trading for a while with a good number of historical trades under your belt, you’ll no doubt understand how manic your emotions can be when trading.
One minute you feel cloud high, then the next minute an overwhelming sickening feeling of nausea sets in, and you think you are about to lose your mind.
Need to understand about trading stress
Now trading should not cause you sleepless nights or dictate your mood for the day – if this is the case you are becoming too emotionally involved, are at a risk level too high for your personal tolerance level, and/or do not yet competently know or understand your trading system.
What about trading results?
Another thing, you should not talk to other people about your trading results, this is because it will cause you to be driven by emotion, you will feel compelled to justify losses, and the bruised ego can push you into irrational decisions.
Most people don’t give you an in-depth update on their work situation and profit/loss each day – so you should not too.
Essentially you want to get to a position where you are purely trading from methodology and never making decisions based upon emotions of fear, greed, and ego.
Experienced traders, who have over 5 years of active trading, will definitely know a significant amount of time should be focused on understanding your mind and your emotions.
Forex trading emotions
Most people operate through life completely at the mercy of their emotions. Typically, these people are the ‘victims in life’, you can see them from a mile away, they are the ones blaming others and circumstances for where they find themselves in life, and have excuses for everything; they have no accountability or accept any responsibility for their decisions and actions.
Essentially, they are reactive rather than proactive.
These people cannot make long-term successful traders.
Trading skill and experience is a good factor
Experienced traders, through their long history of active trading, have the advantage of retrospection; being able to review trade performance and their personal interaction with the markets. They are aware of an important fact; that their conditioning, their belief system, has a major impact upon their results. And importantly, they can change any beliefs or conditioned responses that are not conducive to a positive outcome.
Whereas novice traders stumble around blindly bouncing from one emotion to another; inevitably straying from the fundamentals of their trading system and methodology, wondering why they can't achieve any consistency.
With so many changes their system becomes unmeasurable, and it then becomes impossible to duplicate any good performance as they are unaware of what they actually did to get it right. Was it simply chance?
The trading environment to the novice is a whole new world, an experience that is very likely to take a considerable amount of time to work out their place within. Hopefully without doing too much financial and psychological damage in the process.