What does loss of money mean for you? Can you just think about the wide array of emotional reactions that one experiences when he/she grapples with financial loss? It is not easy to tackle financial loss- especially when there is a lot of money involved.
Quite naturally, emotions always run high in the Foreign Exchange Market since money worth trillions of dollars changes hands everyday here. Traders are bound to give in to the excesses of emotions. However, the key is to keep your emotions under control when you’re involved in account forex trading. Neither negative nor positive emotions are advisable. Let us take two instances here.
Let’s work with examples
Let’s say you have already won a few trades and are too happy to stop trading after a few trades. You are happy and overconfident. You keep on executing trades only to find that in one trade you end up losing a substantial amount. Now for the second instance—you have just lost a trade and are not ready to trade anymore. You are so pessimistic that you are not willing to try your luck just because you have failed once or twice. Emotions, in both these cases, have played a played its part in governing the traders’ chances here. In the first case, it was the excesses of positive emotion that led the trader to become overconfident. In the second case, however, it was negative emotion, which stopped the trader from trying only after failing once (thereby stopping him explore possible chances of winning). A trader should know where to start and stop. At times, emotions play a spoilsport. As such it is important to understand how to control emotions while you are trading. Even the most successful traders out there know when they should actually stop. Not even a string of successful trades can make them play beyond a certain point. Similarly, they know the importance of trying as well. They will never stop just because they have failed once or twice.
So, keeping a trader’s emotions under control remains a part of his forex education as well. It is very important to understand that productivity turns out to be extremely helpful when it comes to trading and keeping your emotions in check. And, here are few ways in which you can increase your productivity:
Make sure you are guided by a trading plan
It is very important to ensure that you are actually preparing a trading plan right before you actually start trading. In depth market research will help you analyze financial trends in a better fashion. There is little room for impulses in trading. While you’re chalking out the plan you should also determine when exactly you should stop trading. Your trading plan should have sufficient room for improvements and revisions.
Conduct in-depth market research
As already mentioned above, the kind of market survey conducted by you will go on to govern the chances of winning or losing since without market research you will not be able to track the financial trends and predict their future movements.
Analyze at least 5 different ETF charts and find out why exactly you would want to trade. Pick out the bullish and bearish reasons for the same.