Now that we have explored emotions that make us hesitant to trade, we will take it a step further.
We will explore emotions that have the opposite effect and make us place trades when we really shouldn’t.
These emotions include Greed and Impatience.
And while all traders are guilty of these at times, regardless of experience, understanding the logic behind these may limit the snowball effect of trading impediments.
Can’t wait to learn more?
Bulls make money, bears make money, and pigs get slaughtered.
Have you heard this popular forex saying before?
It basically means that if you are a greedy pig, chances are you are going to lose your money.
It may sound harsh, but it’s the truth. Greediness is the worst enemy of forex traders, and yet it is still one of the most common emotions in the markets.
This psychological stimuli usually emerges when traders have a more positive experience during trading and want more of it.
It’s the crack of Forex, really.
Trading psychologist believe that the secret to being a successful trader is to know when to call it quits and take your profits.
Only if it was that easy, right?
Don’t let greed overpower your strategy.
When your trades are going well, yes, it is natural to be excited about the potential for even greater gains.
But it is moments like that when you can’t allow greed sneak up on you and destroy your trading account.
Instead, stick to your trading strategy.
If your indicators are telling you it’s time to close and take your profits, listen to them. Close your positions, get your profit and leave. Don’t keep your trades going in the hope of ‘making a little more’.
At the end of the day, your trading plan is there for a reason. To take the emotion out of your trading decisions.
And whilst it is easier said than done, it’s crucial you identify the sensation of greed when it comes, acknowledge it, and let it go.
Logic and being rational with take you further than ‘making a little more’.
It’s not worth it. You’re not a greedy pig. Stick to your plan.
Patience is integral to discipline and it is crucial that you have patience with your journey and your positions.
However, impatience is a negative psychological stimuli which can lead to failure if not controlled properly.
Instant gratification is a common desire in life, but when it comes forex, you gotta be patient.
And whilst we all know that the almighty dollar is a moving force in forex, it isn’t a is a get-rich-quickly scheme and you ain’t gonna become a billionaire overnight.
Impatient traders tend to make rushed decisions and place trades way too risky.
In their heads, they are increasing the potential payouts, but what they don’t realise is that they’re simultaneously increasing the size of their losses.
And more often than not, such decisions lead to losses rather than gains.
And what happens after?
Impatience leads to dissatisfaction, and dissatisfaction can lead to feelings of discouragement and eventually wanting to quit.
When placing trades, it is important you are patient and wait for the right opportunity to enter rather than just jumping into a trade right then and there because ‘you want to’.
As the saying goes, ‘a little knowledge is a dangerous thing’, and placing trades before you’re absolutely certain is a sure route to disappointment.
Instead, trust your analysis, follow your strategy and remain patient.
Trust me, it will pay off!