emotion vs. prediction

[Pat494]

I think men generally have a much more sanguine approach to life's problems and that helps. No shrieking or throwing stuff about. Oh no.

 

[Solas0077]

Northeastern Univ. Professor Lisa Feldman Barret says she has found the specific location in the brain that is the "epicenter" of predictions. Her report asserts that limbic tissue which helps create emotion is the center of predictive ability.

This is pure speculation

 

[jools-radicalclarity]

It is not so much about keeping the emotions under control. It is about becoming aware of them.

Completely agree

 

[dbphoenix]

If you're emotional at all, you're doing it wrong.

Db

 

[pennycapitalist]

When I emoted on each trade independent of the trades before it, my emotion matched the trade. I learned to smooth my emotions over a whole series of trades. It helped for me to believe that over a whole series the end result would be profitable. Recently I had 14 losses in a row; my confidence began to wane. I took a couple of days off from the market, confidence came back, I went back to the market with my same old system and took seven straight wins. When the 1st loss came, it came with little emotion except gratitude that I have learned to limit my losses and maximize my wins tuned to the current market. When the market moves against me and my emotions start to rise, I recall my resolve to trade and believe in the series rather than the individual, watch the stop line on my chart knowing everything is under control. I may move my stop closer to the negative price movement...but never away from it. A history of success in the series drains the emotion of a single losing trade...even a number of them as I mature as a consistently successful trader.

 

[amittimothy]

Forex market is not for those who are emotional and take any Trades based on their emotions and never base their predictions on their Knowledge and its really dangerous for any one who want to start Forex with such habit.

 

[mlawson71]

Forex market is not for those who are emotional and take any Trades based on their emotions and never base their predictions on their Knowledge and its really dangerous for any one who want to start Forex with such habit.

We're all emotional though. It's human nature to be emotional, there's nothing wrong with that. That said, learning how to control your emotions and keep a cool head is vital for any trader wanting to succeed.

 

[tomorton]

For "emotions" in trading we normally think of Fear and Greed. Conjures up an image of a hysterical, manic, bi-polar, frantic trader.

But the term is loose in English and maybe we should keep in mind the danger comes form anything psychological which we project onto the trade, rather than objective information from a chart, etc. So, suspicion, hope, bias, optimism, pessimism, instinct - and all other mental "attitudes" and biases - are going to be prejudicial to objective trading.

 

[zenzaa]

we can differentiate between affective characteristics (eg. moods and emotions) and cognitive (eg. beliefs and expectations). As regards social factors (eg. Networks and social norms), they act facilitating or inhibiting the expression of a given behavior.

 

[Arashimuro]

I don't think emotions should be the directing force when making a decision, whether you're entering a deal or something else. If you keep in mind that emotions are of a temporary nature, you will probably regret the decision you had made several minutes prior and lose a large sum of money in the end. My advice is before entering a deal, think it over for a few minutes and then, after calming down a little make the right choice.

 

[Alexander1]

Here, emotions are generally unnecessary. They need to leave, only make decisions with a clear head and no emotion

 

[dbphoenix]

it is not practically possible to become emotionless as you are not a trading robot.. but yes you should have a good command on being both depressed and excited if you want to do trading successfully.

Actually, it is *click*.

If you're emotional about your trading, you shouldn't be trading.

 

[Bessithomfor1984]

Like someone said early in the thread you cannot really escape from your emotions. However the purpose is to not make a trading decision based on emotions, but rather on objective factors.

 

[DavyBFX]

So true! This is the thing I struggle with most. I follow my rules and stay true to what I think will happen, but nothing prepares you for the feeling I have in my heart when I have a losing position and it's getting worse! The only thing I can do is set up my stop loss and leave my laptop alone. Watching the trade makes it so much worse.

 

[Pat494]

So true! This is the thing I struggle with most. I follow my rules and stay true to what I think will happen, but nothing prepares you for the feeling I have in my heart when I have a losing position and it's getting worse! The only thing I can do is set up my stop loss and leave my laptop alone. Watching the trade makes it so much worse.

Crack open another can of beer and it doesn't feel so bad.

 

[cesar470]

One of the biggest factors why new traders fail is controlling one’s emotions.
I found very reliable tips that can help you with trading non-emotionally:

1. After your analysis on the trade – set your stops and limits and NEVER adjust them. Sometimes you will be right, sometimes wrong, there is nothing in between. But keep in mind that if you start applying changes – that is a bad habit. Bad habits leads to more bad habits and the snowball gets bigger and bigger. Time to start with good habits as it would lead to other good habits.

2. You need to accept the fact that there will be “LOSING TRADES” – there always is. Most new traders cannot accept this truth, which is another reason why they FAIL. This leads to revenge trader & over-trading. At least 90% of newer traders will abandon a system if it yields 10 losing trades in a row… They will look for the “Holy Grail” strategy which clearly does not exist in trading.

3. You shouldn’t set “daily goals”. You don't know what will happen today, tomorrow, or the day after. Thinking you will for example, gain 1% every day is unrealistic. There will be losing days, flat days and big up days. Not reaching a previously established goal will led again to over-trading.

 

[Pat494]

BUT without emotion one is half dead if one can no longer feel joy and happiness. But as you so rightly say the other side of the mountain is sorrow and frustration.
Suit yourself and your situations maybe. Where the highs and lows aren't too excessive.
Moderation may be boring sometimes but there are huge advantages when it really matters imho
Patience is all important but a hard lesson to learn.

 

[JanetW87]

One of the biggest factors why new traders fail is controlling one’s emotions.
I found very reliable tips that can help you with trading non-emotionally:

1. After your analysis on the trade – set your stops and limits and NEVER adjust them. Sometimes you will be right, sometimes wrong, there is nothing in between. But keep in mind that if you start applying changes – that is a bad habit. Bad habits leads to more bad habits and the snowball gets bigger and bigger. Time to start with good habits as it would lead to other good habits.

2. You need to accept the fact that there will be “LOSING TRADES” – there always is. Most new traders cannot accept this truth, which is another reason why they FAIL. This leads to revenge trader & over-trading. At least 90% of newer traders will abandon a system if it yields 10 losing trades in a row… They will look for the “Holy Grail” strategy which clearly does not exist in trading.

3. You shouldn’t set “daily goals”. You don't know what will happen today, tomorrow, or the day after. Thinking you will for example, gain 1% every day is unrealistic. There will be losing days, flat days and big up days. Not reaching a previously established goal will led again to over-trading.

I agree with most read on this thread, also the tips you've provided but I do find myself in concord with all of them. Regarding the last tip: one needs to be flexible, yes, so rigidness in the form of strict goals, be it daily, bi-weekly or monthly, can be fatal. Nevertheless, it's certainly better to follow an agenda and have some sort of plan/objectives, otherwise chaos will reign (or at least I think so, I'm still pretty new). This also covers partially the first tip about lack of adjustment. Creating such a habit will definitely imprint on your trading style and sure, you'll probably soon start making frequent exceptions, basing your decision on some twisted rational. So I also agree here, but making never, ever adjustments just won't work. As said in the end with the advice not to put daily goals, the market is constantly changing, thus the strategy with stops and limits should also be evolving. After careful review and consideration, but evolving nevertheless to match the market occurings.

 

[Arashimuro]

I believe that only programs and robots are capable of trading without emotions, in all other cases, emotions are simply inevitable and sometimes even useful.

 

[Pat494]

I believe that only programs and robots are capable of trading without emotions, in all other cases, emotions are simply inevitable and sometimes even useful.

One needs every little advantage to beat the markets, even crafted emotions.