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

  1. #1
    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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  2. #1671
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    I will say that we can avoid the emotions when trading and become better trader if we know how the market works. Therefore having a good discipline and plans. if we can stick to the plans we have when trading, then I am sure we can over come the emotions we have when trading. Most importantly is never to take trades based on emotional trading.

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  3. #1672
    Trader tfs2012's Avatar
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    [lang=ar]
    Quote Originally Posted by Real View Post
    I will say that we can avoid the emotions when trading and become better trader if we know how the market works. Therefore having a good discipline and plans. if we can stick to the plans we have when trading, then I am sure we can over come the emotions we have when trading. Most importantly is never to take trades based on emotional trading.
    It is not necessary to understand the behavior of the market and even the ability to predict its movements does not necessarily mean that you will be able to control your emotions stick to the money management and your trading plan.often this is caused by greed or fear and not because of the analysis itself[/lang]

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  4. #1673
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    well if you can not control your emotion so i advise you to open mt4 only twice in a day but on the trade you must put tp and sl on that after award you donot need to open mt4 again n again why take you will become depress and emotion will come in your mind :)

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  5. #1674
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    The unfortunate fact is that in spite of thousands of threads on emotional prospects traders fail to balance their emotions here. No matter which type o situation prevailing in the market, stable or volatile, a foreign currency exchange trader can’t afford to be emotional while he is opting to take quick decisions. A forex trader needs to develop the right trading attitude to think of rationally and he should try to take decisions of trading after proper analyses.

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  6. #1675
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    It is true that emotions do not let us to trade well and correctly. I am not a psychologist and can little to advice and only from experience of my own. Maybe someone use the last money in forex and want to win in any case - there is no success. The others look to many times to computer, maybe they need less to look at. And the main bad emotions are when we start to lose.

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  7. #1676
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    i guess people get emotionally attached to this business when there lack better understanding on how trading is to be done,forex is a risk based business and there is no sure trade,we can loss at anytime while we are trading the market and this is why it important to understanding how analysis is being done to reduce the losses one might face

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  8. #1677
    Trader xauyuro's Avatar
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    Quote Originally Posted by RoboForex Trader View Post
    To Set an order and forget

    The Simple task of clicking "buy" or "sell" may itself be an emotional challenge, because many traders are simply not able to overcome the fear of being wrong. Fortunately, with modern development of trading technology you do not need to press the button when you enter and exit trading positions.

    This possibility gives a great benefit, which may be used by new traders. Some people call it a trade on the principle of "set and forget". It is executed through the related orders.

    For example, the initial order can be set for a long position. By an order to buy a protective stop order to manage a risks and a limit order to fix profits are also can be attached. On market terms, this is called "tripartite order."

    Once you figure out where is the level of support (ask), level of your protective stop loss order and profit target, and decide you want to use this trading opportunity, you can use this tripartite order to really staying out of the deal.

    You can (and should) move away from your computer, and the transaction will be fully realized without your participation. This is - a unique way to reduce the emotional challenge of trading and to have more free time.

    Focusing on risk

    Two facts incidental to trading cause discomfort for most people. First, there is no certainty about the future results, and second, you will have losses. You have to realize that the best traders - those who know how to adjust the loss properly, keeping the size of the loss (not necessarily the frequency) at a minimum.

    For example, when the price is approaching the level of resistance for opening a short position, you may have different thoughts that determine whether you succeed as a trader or not.

    The idea of the novice trader is aligned with concern over the possible price going down, and the possible negative outcome, in case the trader is wrong. At the time, as consistently profitable trader is actually very calm, because he knows that the trading opportunity suggests a very low risk, as he opens position as close as possible to the protective stop order.

    Make sure that you always fit your position size to the level of risk at which you feel comfortable. And when it comes time to enter the market, rather than to watch the schedule and fear of potential losses, focus on how a low risk this trading opportunity involves.

    this is what I am trying to apply in my trading. that is set and forget.
    because it would feel overwhelming if we were constantly on the monitor screen staring at a moving chart and sometimes pausing. really, habits like this are very easy to trigger stress and make emotions become unstable. what's more if the market is experiencing a fluctuating correction.
    we will feel wary whether the market will go as planned or will turn around so we will lose money.
    because it's set and forget it's very important to apply. do a good analysis, make careful planning. open trade, set stop loss and TP. then close your MT4 and do other activities that can calm yourself down.
    if the price goes down Take Profit then that's your fortune,
    but if the hit stops loss then you can try another opportunity.

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