When beginners
start trading in the Forex market, almost all of them use a demo account. This
allows them to learn more about the nature of this financial market and identify
the patterns of behavior that work. At the same time, they
can only experience the full range of emotions associated with Forex trading
when working with real money. Most newcomers are
overwhelmed with the tremendous excitement of winning. If the trade ends in a loss,
it makes them upset, irritated, and even stressed out.
Constant
psychological tension unsettles traders, which is why they begin to make more
and more mistakes. Fear and greed can lead to a zero balance. Today we will
tell you about the reasons why traders experience emotional shakiness and how
to cope with the psychological factor.
Multiple
studies of trading have enabled scientists to determine the number one cause of
psychological stress, bordering on a nervous breakdown. As it turned out, the need
to constantly monitor the charts is to blame. Strange as it may sound, it is
the need to track price changes that exhaust the trader the most. In a sense, gamblers
LIKE to follow the price action, eagerly waiting in anticipation of profit when
they see the trend change in their favor.
Many
traders have admitted that they often get more satisfaction not from increasing
their account balance, but from monitoring an open trade. Dynamic price charts excite
and get the adrenalin going. The need to experience the same emotions once more
leads to a kind of chart watching addiction, and the trader keeps on doing this
even when it is not necessary at all.
Constant monitoring of
a price chart can be considered a kind of drug. It produces a feeling of euphoria
and satisfaction. At the same time, such a habit is exhausting, and the trader
begins to make unforgivable mistakes.
The
financial market is volatile, so the profit and loss ratio will change constantly. The trader will experience either
satisfaction or a dramatic drop in mood. This is emotionally draining and makes
the trader inattentive and irritable. As a result, the trader sees signals to
enter or exit the trade when there are none, and any rash decision leads to
losses that will multiply in geometric progression.
To
eliminate the emotional factor from trading in the financial market once and
for all, learn the following efficient ways to deal with them:
Use of a longer timeframe.
Scalping is
more interesting than daily chart trading. However, the latter will free traders
from the need to constantly monitor the price, and accordingly, reduce the nervous
tension.
Goal setting.
Traders have
to start their days by setting their goals. Let's say today's profit is 20
pips. And once these 20 pips are earned, they can safely close the terminal
window and rest. It is a healthy habit to adopt: traders no longer depend on
charts on a round-the-clock basis as the time spent trading is reduced. As a result,
the psychological pressure also reduces.
Please note
that it is important to set a loss limit for yourself so that serious losses do
not get you stressed.
Lot size reduction.
The reality
is that reducing the position size by at least 5 times allows traders to make
more rational and sensible decisions. The thrill of excitement disappears and each
trade is carried out in a thoughtful and precise manner. As a result, they begin
to use logic when opening positions, to get a feel for the timely closing of their
positions, and to interpret trading signals correctly. Only having developed
these skills in yourself can you move on to trading with larger sums of money.
If you find
it difficult to follow these rules and you feel yourself overcome with emotions,
the best way is to use trading robots. These automated systems free traders
from the need to participate in trading in the financial market. All they need
to do is to enter their input data. Then the system will continue to operate autonomously,
while the traders will get in a balanced state of mind and be able to continue to
perfect their skills, developing new efficient trading strategies.
Choose highly successful trading advisors now! Get full access to the automated trading system, and stop worrying
about money because it will do the entire job for you around the clock!