Joe Ross
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The winning currency trader must be cold, calculating, and logical. It is absolutely necessary to control your emotions, rather than let them interfere with your trading decisions. While it is true that fear and greed are major factors in market behavior, there are other emotions, such as anger and disappointment, that influence our trading decisions.
Because emotions can interfere with discipline and sound decision-making, it is necessary for traders to take a methodical approach to their trading. By trading a method it is possible to gain an awareness of market behavior, and in that way learn to master and control our emotions.
Many traders become fearful when they perceive that a loss is imminent. When a loss is clearly going to happen, it is useful to close out a trade as soon as possible. But many times, traders tend to follow the crowd. They see other traders selling or buying, and so they sell or buy rather than following a proven set of rules. *
The winning currency trader learns to take advantage of fear. He or she learns to stick with what they know works in the long run.
One reason to use a proven method is to somewhat mechanize both fear and greed. It is reasonable to be fearful when your money is on the line. That's why winning traders protect themselves by trading with a detailed trading plan and a known scheme of risk management. Methodical trading allows you to minimize risk, and trade more effortlessly and with less fear, because you have the courage of conviction in knowing that statistically you will win overall.
As with any plan or method, it is more than likely that the market will sometimes fail to meet our expectations rather than behave in accordance with our plans. There is no holy grail of trading.* If you accept this fact and take precautions to work around it, you'll be able to minimize the influence of emotions. You'll trade more effortlessly, creatively, and profitably.
Because emotions can interfere with discipline and sound decision-making, it is necessary for traders to take a methodical approach to their trading. By trading a method it is possible to gain an awareness of market behavior, and in that way learn to master and control our emotions.
Many traders become fearful when they perceive that a loss is imminent. When a loss is clearly going to happen, it is useful to close out a trade as soon as possible. But many times, traders tend to follow the crowd. They see other traders selling or buying, and so they sell or buy rather than following a proven set of rules. *
The winning currency trader learns to take advantage of fear. He or she learns to stick with what they know works in the long run.
One reason to use a proven method is to somewhat mechanize both fear and greed. It is reasonable to be fearful when your money is on the line. That's why winning traders protect themselves by trading with a detailed trading plan and a known scheme of risk management. Methodical trading allows you to minimize risk, and trade more effortlessly and with less fear, because you have the courage of conviction in knowing that statistically you will win overall.
As with any plan or method, it is more than likely that the market will sometimes fail to meet our expectations rather than behave in accordance with our plans. There is no holy grail of trading.* If you accept this fact and take precautions to work around it, you'll be able to minimize the influence of emotions. You'll trade more effortlessly, creatively, and profitably.
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