Frustration and disappointment
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  1. #1
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    Frustration and disappointment

    Forex trading (and any other trading) probably is the only business in the world that generates so much negative emotions in a short period of time. One of such emotion is frustration and disappointment.

    Trades in trading books look pretty, but in real trading process you will execute a lot of trades that don’t work, market will reject most of your scenarios and ideas.
    Think about it – there’s very weak correlation between what we expect and what really happens in the market. I don’t say that it’s impossible to close 70-80% trades in profit, but it is possible not because of our prediction (in this case we could employ high leverage and easily become millionaires), but because of risk management (your stops are distant, your take profits are close to the market).

    Professional traders who follow trends, say that their average quantity of winning trades is about 30%. Day traders might have their quantity of winning trades close to 50-60% (they achieve profitability reducing risk on possible losing positions), but overall predictability of the market rarely exceeds 60%. It means that if you want to benefit from being right (hello, binary options traders!) you are likely to be very disappointed in the long run because your results will tend to look like random. Why? Because profit is achieved not on just knowing where the price will go, but rather on knowing where price will most likely go and cutting your losses in cases if it doesn't work (it will not work pretty freqently).

    But nevertheless, low predictability of the market will generate frustration for a trader. From time to time, losing streaks will occur (even if trader does everything right) and core ability for a trader is to tolerate this feeling.

    I don’t know any other occupation that can generate so much frustration. Maybe, sales clerks experience something similar, when they have to talk to strangers and try to sell goods to them. One of 100 persons can buy their goods, and in the process (after 80 rejections) they can feel frustrated and tired. But trading is worse because you are not just getting rejection but also getting loss.

    So, one of very important psychological feautures of trader’s character is resilience to frustration and disappointment.

    How can we develop such kind of resilience?

    I will share with you method that helped me:

    When we are stopped out of the trade, we immediately experience frustration (we thought it must have worked, we’ve been with this trade, we used to manage it). The key is immediately switch our attention to something else. If your trading is active enough, you might switch immediately to different trading instrument and start searching for a new setup (but not for revenge trade, you must search for a completely new trade)

    One trader, friend of mine and clinical psychologist, had developed so called «6-periods rule». If he is stopped out twice, he applies «6-periods rule». It means that he should wait for 6 cadlesticks (bars) to pass, until he will be able to make another trade. If you trade on H1 timeframe, it’s 6 hours. After 6 periods, we are able to let go all frustration and disappointment that we have.

    Of course, every trader should design his personal way. Find something that works for you and apply it!

    Good luck and trade consciously!

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    Last edited by Value trader; 01-01-2014 at 04:28 PM.

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    forex trading is such a business that it will create a huge profit as well huge losses...so we will always be either happy with it or have frustration and disappointment...if we are losing money in forex trading, then frustration and disappointment will be always there...but we can learn from our losses and use this time for making a complete analysis ..then we should try to sort out our mistakes and try to make a good plan for it....its better that we use our frustration for improving our trading skills rather than just feeling bad..

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    Quote Originally Posted by bangash4u View Post
    forex trading is such a business that it will create a huge profit as well huge losses...so we will always be either happy with it or have frustration and disappointment...if we are losing money in forex trading, then frustration and disappointment will be always there...but we can learn from our losses and use this time for making a complete analysis ..then we should try to sort out our mistakes and try to make a good plan for it....its better that we use our frustration for improving our trading skills rather than just feeling bad..
    That's true, I think loss is a part of trading, no one can trade with no loss, so every trader must learn to accept losses and never be sad or angry after a loss. Insteed of trying to revenge the market, try to understand why you lost your trade, then you will take a lesson from your loss and avoid such a mistake in future.

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    What i know on this is that traders that has money are the one that is enjoying the market, when the trades get little money, he can make big $$$, and this will not make frustration for him when good money plans are in place for him. This should be the way that we should think, not all ideology about this will work fine.

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    Sometimes frustration occurs not because of the loss, but because best laid plans don't go like we anticipated. If you are emotionally connected with your trade, frustration can run wild - your paper profit will make you feel betrated. Sometimes, it's not even about profit or loss - it's about our inability to understand what the market does. If we trade and every time market does something different from what we expected, we can lose ground under our boots and feel frustration too.

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    Last edited by Value trader; 01-01-2014 at 04:31 PM.

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    having tesion when trading is a negative emotion and psychology of forex trading does not agreed to this negative emotion. i prefer to trade in a relax atmosphere . trading under tension will eventually brings frustration . feeling of tension will tensed you up and make you to misbehave when trading. feel relax when you trade. be comfortable

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    Quote Originally Posted by Value trader View Post
    Sometimes frustration occurs not because of the loss, but because best laid plans don't go like we anticipated. If you are emotionally connected to your trade, frustration can run wild - your paper profit will making you feel betrated. Sometimes, it's not even about profit or loss - it's about our inability to understand what the market does. If we trade and every time market does something different from what we expected, we can lose ground under our boots and feel frustration too.
    I had disappointment because price won't go lower or higher than my prediction, that's mean my pending orders won't be filled
    I still can jump on trends by buying or selling on first pullback, but it sure destroyed my confidence
    Of course that was much better than losing money.

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    Quote Originally Posted by primetrader View Post
    I had disappointment because price won't go lower or higher than my prediction, that's mean my pending orders won't be filled
    I still can jump on trends by buying or selling on first pullback, but it sure destroyed my confidence
    Of course that was much better than losing money.
    You mean - you don't want to miss out a move?
    Well, I prefer not to do that - it tends to be destructive as any impluse trading.
    But for some traders it may work, why not?

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    You can have this often, but be careful that you do not let this affects your trading skills, it is your persistence in the market that will get success for you, no traders get money when they have seen trading in the hard way. You can not get the values of others in total, but you can make your own value to be better when you believe and do it right.

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    the newbie will face many emotion like frustrate or desperate because he not have any experience or knowledge about the market or the trends so he face many emotion because he fear from loss and m.c but after time he know that loss not bad but learn us how to recover and fix the mistakes

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