What emotions do you encounter the most during trading?

[Kristine Christensen]

Forex trading is not for everyone. It takes discipline and patience. And even though the profits are large, many people are tempted to become greedy. I had faced emotions like greed, panic, and loss of control all the time when I started trading. However, by now, I know how to minimise these feelings.

 

[GriderGlib]

@Simanthanderson I agree and a trader fears mainly when he tries to trade with money he can’t even afford to lose.

 

[louisegoodman]

This is a very relatable post to which every trader can agree. We are humans and we can do a lot to keep our emotions in control. Emotions belong to us, thus we must control them and not the other way round. It is very important to be emotionally stable while trading.

 

[smithanderson]

Forex trading is not for everyone. It takes discipline and patience. And even though the profits are large, many people are tempted to become greedy. I had faced emotions like greed, panic, and loss of control all the time when I started trading. However, by now, I know how to minimise these feelings.

Winning over your emotions is a slow process and discipline and patience are two vital aspects to deal with it.

 

[smithanderson]

@Simanthanderson I agree and a trader fears mainly when he tries to trade with money he can’t even afford to lose.

If you are aware that emotions are creating a problem in your way, it’s advisable to shift to a small account and practice there until you learn to control your emotions.

 

[Thaumatology]

@Kristine Christensen You are right. Emotion control is a big problem in the beginning. Most of the traders are able to reduce this problem with time and experience. But one should not stop working on controlling emotions because a human mind can lose control of emotions anytime. Trading according to the rule book is going to help maintain control.

 

[WalletInvestor]

This is related to anger, but vengefulness is something a lot of traders experience, especially in the beginning. Feeling vengeful can lead you to revenge-trade and try to get your losses back as soon as possible, but it usually ends in bad decisions and more losses.

 

[Zeitgeist]

Panicking while seeing movement in the market is more common I think. Traders tend to make bad decisions when they see sudden movements in the price. They do not stick to their trading plan and often lose money because of that.

 

[Accretion]

From greed, happiness, sadness, fear, to anxiety, traders experience all sorts of emotions when they trade. Avoiding them is a must. I use strict trading rules that help me stay focused.

 

[Riffraff]

Apart from these, I would say revenge-trading is another emotion that traders encounter the most. After losing to the market, traders feel the urge to get back their money at all costs, However, traders should avoid this. Revenge-trading is bad and could lead to significant losses.

 

[Snicket]

I mostly feel anger when I lose a trade and then I want to trade again to recover my lost money. But this is the point where I tell my mind to cool down and be patient. Revenge trading can result in even bigger losses. Controlling emotions in this situation can save a lot of money.

 

[smithanderson]

This is related to anger, but vengefulness is something a lot of traders experience, especially in the beginning. Feeling vengeful can lead you to revenge-trade and try to get your losses back as soon as possible, but it usually ends in bad decisions and more losses.

Most of the traders fail to understand that it's very hard to recover your losses. If you are not confident enough just don't go with a trade because you can't undo the negative outcome and if you've failed just accept it, learn from it and move on.

 

[smithanderson]

None any more! But the first few years of learning how to trade were a different story. Frustration, anger, fear, anxiety.... getting out of bed at 3am to check losing trade positions. But I've been through enough major drawdowns now to cope with any uncomfortable trading situation... it comes with experience. Trading is just a job for me now. I stick to my set of rules and keep emotions out of it.

This is the best way to keep emotions out. Just follow your plan and ignore all the noise. Though it also needs practice to be able to stick to the plan.

 

[WalletInvestor]

Most of the traders fail to understand that it's very hard to recover your losses. If you are not confident enough just don't go with a trade because you can't undo the negative outcome and if you've failed just accept it, learn from it and move on.

Yes, definitely. Entering a trade when you can't keep a cool head is usually a mistake.

 

[smithanderson]

The strategy I trade does not use any hard stop loss and so it's imperative that I just approach it systematically and without any emotion. It took years to master that, I can tell you! I've experienced many uncomfortable drawdowns but it's all a learning curve. I'd rather deal with an extended drawdown than have stop loss orders erode my account - "death by a thousand cuts", as they say.

That’s interesting! Although I would never dare to enter a trade without any stop loss. Knowing how much I can lose on a trade allows me to plan my trades better.

 

[GlenWest]

Why is nobody talking about revenge-trading? That is the worst emotion because it can make you addicted to trading forex, without realising the impact it can cause to a trader, both financially and mentally.

Traders can never eliminate emotions in trading. They can, however, control them. A strict trading plan is a good way to avoid getting distracted during trading.

 

[smithanderson]

I can totally understand that. I used to trade fundamentals and always with a stop loss, for about two years. I made some profit, maybe 20 - 30% in a year but I got tired of dealing with macroeconomics, politics and the state of the world each day and so decided to become a technical trader instead.

I'm proficient in all aspects of technical trading (candle formations, patterns, etc etc) but ultimately I found a grid strategy (with no stop loss) to be the most profitable over the long-term. Sure, I have extended periods of drawdown but I approach forex trading the same as I would investing and prefer to average in to positions over time, rather than stick to a firm stop loss and take profit, which is what retail traders are taught to do from the outset. My view is that a stop loss benefits the broker more than it does the trader!

As you will know, there's no right or wrong way to trade, we all capitalise on the market in different ways... but I certainly see stop loss orders are more damaging than useful in most circumstances. There are other ways to manage losing positions that keep you in the game.

Is your strategy viable during volatile hours or do you only trade when the market is relatively quiet?

 

[WalletInvestor]

The toughest emotion for me to overcome tends to be fear. It was especially prevalent when I was just starting out.

 

[timothydanie]

The toughest emotion for me to overcome tends to be fear. It was especially prevalent when I was just starting out.

I agree! Fear is a very common emotion that every trader faces at times during his trading journey. It hinders the rational approach of a trader. It is always good to have a strict trading plan and calculative strategy.

 

[Polakandil]

Fear and greed is an emotion where trader needs to control it when working on trading days, how to minimize the fear itself as a trader need to create planned trading with keep risk management to manage the funds, experts say maximum risk trading is 2%, but sometimes trader has own preference for risk level.