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Thread: Demand pressure and performance anxiety

  1. #1
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    Demand pressure and performance anxiety

    Hi everybody!

    Today I want to talk a bit about two dangerous states of mind that traders face with: Demand pressure and Performance anxiety.

    While performance anxiety occurs after winnings streaks, demand pressure pushes trader to make trades, because he needs to make money (demand pressure is fear not to make profits, performance anxiety is fear not to keep them).

    For every trader those issues are different, but for most of them performance anxiety is more destructive.

    Why?

    If you haven't made profits yet, it's easier to cut your bad trades, because you are more critical about your ability to predict and to make "killing trades". If you had "flat" period in your PNL, or try to recover yourself from losses - odds that you will be more modest in your expectations are higher.

    And it helps to improve your performance! You start filtering bad trades and finally accept couple of good trades that move your equity curve forward. In some cases, you may feel that now you are trading "in sync" with the market, and you are inside a winning streak.

    But after that, you understand, that it's hard to keep that state of mind, and you start experiencing "performance anxiety".

    It's an emotional state and it makes you increase your risk to eliminate that discomfortable feeling, making more proftis (proving yourself that you are good trader and have nothing to worry about that much)

    Guess what happens?

    You multiply your anxiety by your increased leverage, and finally you may find yourself paralized - you are so emotionally connected with your trades, that can't cut bad ones, stop thinkng about them and go search for new ones. Also, odds that you will start do some revenge trading are also high.

    You understand that you should reduce your risk, but then you will have to face your anxiety which is uncomfortable and hard to live with.


    So, universal rule - DON"T INCREASE YOUR LEVERAGE when you feel performance anxiety.
    Embrace that feeling, try to live with it not to get rid of it. Maybe in some time you will find that you are more connected with roots of that feeling and will be prepared to reduce that anxiety.



    What about demand pressure?


    It is also emotional, and I would say - it's about expectations, we think that your goal is "to make X dollars a month". If you think this way, you would more than likely be pushed to make trades - and I would bet that those trades will be "bad ones".

    That's why it's so important to have process goals instead of performance goals.
    Don't think about money or any financial targets.

    Your goal is to be the best trader you can be, to trade in your best way, to improve every day. Other goals, especially financial, will keep you away from consistency.

    So, HAVE PROCESS GOAL INSTEAD OF PERFORMANCE GOAL

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    Last edited by Value trader; 12-30-2014 at 11:18 AM.

  2. #581
    Trader shambca7's Avatar
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    Quote Originally Posted by Sascha View Post
    both the losses and profits will be gained in small stake too. some people might be doing this and take forex as an investment in long term way with only small risk but higher profits in longer time. while other traders do the contrary by taking high risk to get the higher profits. it also increase the risk of loss. it's cool if we trade using binary option because the loss is limited per position but gain at least 80% of the money we've risked. unlike forex trading which i can lose entire capital with only one increased negative position.
    But this is good for trader's if they are working with lower risk and profit because something is better than nothing in this risky market. First of all a trader have to understand that small amount of investment would not give him big amount of money in one day. We can grow small money but for that we need a lot of time and patience in trading.

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  3. #582
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    trading will be going better if we can calculate our money management properly and it will help us to trade more secure and away from exposed to margin call or stop out level from brokers.Although still poor trader to analyze the market, but with discipline in money management / risk management, then he's not too worried to lose a lot of equity quickly.

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  4. #583
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    Quote Originally Posted by zintek View Post
    However, if the stress gets too great it can actually reduce performance. ... Uncontrolled stress can easily become frustrating given the right high-pressure .
    [lang=ar]Of the strongest causes of stress and anxiety when trading is to risk losing a large percentage of the portfolio size
    What caused the strong psychological pressure on shops may sometimes pays to take a fatal decisions.
    Usually comes step increase risk to size with the acquisition of stores confidence in himself and his decisions and based it begins to increase the risk to increase profits, even though the store uses the same successful system with him beforehand, but increase the size of the risk and pressure caused him could change his look completely to the data in front of him[/lang]

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  5. #584
    Trader tfs2012's Avatar
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    [lang=ar]thanks for all these informations and i want to say that increasing the leverage will encourage the trader to increase the risk and this will make process of trading dangerous and may lead to a big loss or margin call,and then i agree with you that the trader should put a fixed amount of money to make each month because he will not be able to do that and he should put average profits for him each month[/lang]

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  6. #585
    Trader maryrosi's Avatar
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    Quote Originally Posted by tfs2012 View Post
    [lang=ar]thanks for all these informations and i want to say that increasing the leverage will encourage the trader to increase the risk and this will make process of trading dangerous and may lead to a big loss or margin call,and then i agree with you that the trader should put a fixed amount of money to make each month because he will not be able to do that and he should put average profits for him each month[/lang]
    yes, increasing laverage just kana make you a full risk trading, lavarage is a leverage provided brokers for us, we use in accordance with the capital and style of our forex trading, we use according to our needs, for example, if we are trading with capital $ 1000 , then the best laverage is 1; 1000, it's very good for a beginner trader like me, with low risk.

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  7. #586
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    The competition prevailing in the forex market can create a demand pressures and performance anxiety to the honest. But I personally think that high expectation can lead to sky level divergences between the reality of forex trading nature and the anticipation of a forex trader. A real time practice with the demo trading account can help a forex trader to get an idea of the reality. But a trader should take practice session seriously.

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  8. #587
    Trader nadezhda84's Avatar
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    Quote Originally Posted by Value trader View Post
    we think that your goal is "to make X dollars a month"
    Great review!


    Setting goals is useless and destructive in trading. Keep fishing and you will end with a good revenue!

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  9. #588
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    Stress and pressure is another great factor for forex. Successful forex trader should be free from stress and pressure. Forex traders can not take proper decision because of mental pressure. So, forex traders should keep it in their mind. They should remember for becoming a successful trader. Mental pressure creates obstacle for analysing, opening and closing orders. They also feel anxiety.

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    Last edited by sohelrana; 06-18-2019 at 01:44 PM.

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