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Thread: How to reduce the emotional obstacles for a profitable forex trading?

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    Super Moderator RoboForex Trader's Avatar
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    How to reduce the emotional obstacles for a profitable forex trading?

    Learn how to become a profitable market speculator is not so hard. Logic, rules and strategy - it's certainly not complicated science. Challenge comes when you actually try to execute consistently profitable strategy.

    The main reason for this challenge lies in the fact that we are all human beings with our inherent human emotions. From birth, we try to avoid things that scare us, and look forward to the things that allow us to feel comfortable. If you follow this natural course of action in the trade, then you will be in big trouble.

    Logically, the profitable trader buys when the price dropped, and only after the majority of market participants have already sold (red candles), at the level of price support (demand). Buy when everyone just sold - is not so comfortable action. When opening a short position you should find a situation where most participants have already bought - after a big rally in the market, but it challenges your emotional nature.
    Here we look at three easy steps for reducing the emotional obstacles to consistently profitable trading.

    Change the color of candles

    Most traders use the red and green candles, making the price chart is quite attractive to look at, but it may not always be the best option for trading. If you sell after the price rally and on an objective level of resistance (supply), which is a high-probability trading opportunities, then you are probably ready to sell immediately after a series of large green candle. However, to sell after a series of green candles may be not as comfortable, because it creates a strong illusion that the price is going to continue to move on up.

    There was conducted an experiment with the students, showing them a strong rally to a predetermined level of resistance, which suggests the possibility of trading with low risk and a high probability.

    The color of the candles was changed on the black, allowing them to remove some of the emotional tone during selling at the resistance level. In the setting of the green and red candles, the sale after a series of green candles has caused fear among new traders.

    Change the color of candles - it's not so absurd idea, if you are just starting to trade and too concentrate on the color of the candles. You should always remember: the color is not so much important as their location.

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    Quote Originally Posted by forexfighter007 View Post
    Yes Forex is a challenge of our trading strengths. We should try to reduce usage of emotions and increase usage of knowledge. Emotions are big obstacles in our trading and also big cause for losses. We should not be emotional when we are trading. it brings nothing but loss. No one wants to make loss in their lives.
    Yes Forex is a challenge to our knowledge, mental stability and ability to take timely and correct decisions. After a big loss, emotional trading that follows we end up multiplying our losses. Emotions and feelings are harder to control when we face a loss. Many traders upon incurring losses start trading erratically with the view of recovering their losses as quickly as possible. We need logical thinking to recover our losses.

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    Quote Originally Posted by PROPENSITY100 View Post
    Yes Forex is a challenge to our knowledge, mental stability and ability to take timely and correct decisions. After a big loss, emotional trading that follows we end up multiplying our losses. Emotions and feelings are harder to control when we face a loss. Many traders upon incurring losses start trading erratically with the view of recovering their losses as quickly as possible. We need logical thinking to recover our losses.
    Yes sir and to stand in the challenges we should not turn emotional. Emotions are the main culprits which can hammer a traders career. It needs lot of experience to get rid of emotional trading. The newcomer can not control on their emotions because they often win . but the experienced trader can control on their emotions .

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    From my experiences, i can reduce my emotional obstacles by using stop loss and proper risk management. Since i trade with low risk, only 1-2% risk per trade, then i really can control my emotion well. Many traders can't control their emotion because they trade without stop loss and trade with big lotsize

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    Quote Originally Posted by elena View Post
    From my experiences, i can reduce my emotional obstacles by using stop loss and proper risk management. Since i trade with low risk, only 1-2% risk per trade, then i really can control my emotion well. Many traders can't control their emotion because they trade without stop loss and trade with big lotsize
    Yes risk management and plan can help us trade logically and avoid emotions but wehen we can strictly follow them. Analysis works best when trader has a good psychology. Just analysis is not enough. For example we may close a potentially good trade with a small profit just because of the fear of loss. Its not emotional trading but logical trading that makes a trader successful in Forex. Emotions impairs a traders skills and knowledge.

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    Quote Originally Posted by PROPENSITY100 View Post
    Yes risk management and plan can help us trade logically and avoid emotions but wehen we can strictly follow them. Analysis works best when trader has a good psychology. Just analysis is not enough. For example we may close a potentially good trade with a small profit just because of the fear of loss. Its not emotional trading but logical trading that makes a trader successful in Forex. Emotions impairs a traders skills and knowledge.
    You have right views on risk management. A Trading plan complemented with risk management is very essential to achieve success in Forex. It avoids us to become confused and take wrong actions in trading. If you want to get success in any business then you need good plan.In Forex also you need a working plan that will give you the profit.

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    Registered user tfs2012's Avatar
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    most simple way to reduce our emotions in forex trading is be long term market exposure. Trading for a long time has a way to make traders numb to it. Lengthen the timeframe you are trading. Trade a 1 hour or a 4 hour chart instead of the 5 minute. The longer timeframe allows for a lot less noise in the market and your actions will be considerably slower and more relaxed.

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    Automated trading system can be used for removing the impact of emotions in trading decisions. But it has some drawbacks as well. Traders must try to understand market situations and wisely plan strategy which is best suited to the market needs.

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    Registered user Mata Elang's Avatar
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    Quote Originally Posted by epicresearchindore View Post
    Automated trading system can be used for removing the impact of emotions in trading decisions. But it has some drawbacks as well. Traders must try to understand market situations and wisely plan strategy which is best suited to the market needs.
    Many ways that can reduce the emotions when trading, among others, to find the right analysis before going to open position, if you do not get the desired analysis do not open the position that it can make emotions when there is a mistake when making a trade.

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    One of the sure ways through which I have always reduced emotions during my trading activities is making sure that I always use the right trading leverage and lot, but above all I make sure that all the time my stop loss tool is set at the appropriate level.

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    The number one cause of emotional trouble in forex is greed, anyone that cannot be satisfied with little earning will have serious issues, when the amount you have risked per trade is unnecessarily high, that will put you in a tensed position, you can not control yourself from that moment forward, strict discipline is the antidote for this challenge.

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