Tips for controlling your trading mentality- Forex Intels
We still allow our emotions to control our trades, which leads to significant losses, despite the fact that emotions are the biggest barrier to trading success.
When we make decisions based on our emotions, we run the risk of doing so for the incorrect reasons, as when we purchase a stock in the hope that it will increase.
But when it doesn't advance, we cling to it out of selfishness. We find it hard to admit when we were wrong. There are a ton of instances of this kind.
Your worst enemy is you. When we say it, it sounds just as uninteresting as it does ambiguous. But it's also absolutely true.
The three most important components of successful trading are money management, strategy, and psychology (mastering all three is a requirement for every good trader).
But here's the thing: even if you have a perfect approach and have spent hundreds of hours studying the market and learning technical analysis, your success in trading will ultimately depend on your ability to control your emotions.
Regulating your emotions is the only way to trade successfully and guilt-free. The four emotions that traders worry about are hope, greed, fear, and regret.
To be happy and successful, one must learn to suppress these emotions.
The most successful way to control emotions, according to extensive research, is to make trading more mechanical.
Here, the term "mechanical" refers to automating trading processes rather than relying solely on hardware or software.
WHY CAN'T YOU TRADE EMOTIONAL RESULTS?
- Making a loss on a sale at the worst time.
- Buying at the top and fear of missing out (FOMO).
- Being avaricious and taking on too much risk.
- Trading excessively and frequently out of boredom, FOMO, or greed
- You won't trade when a chance presents itself because you're afraid of making a mistake.
- Believing you are unstoppable after a run of successful trades only to learn the hard way that you are not.
You can use the advice in the following list to restrain your emotions:
- Take a moment to consider whether this is the right thing to do or if this is exactly what you should be doing before you make your next trade. Look closely at your chart and think about what a professional would do in a situation like this. There are times when this brief pause can tip the balance in your favour.
- Early entries and false indications could put traders in a difficult situation. So, wait for a candle before making any decisions. This might enable you to trade more successfully. When you put this idea to the test, I'm sure you'll find it difficult, but that's how you'll discover how emotions affect your choices.
- Experience has shown that mid-candle judgments almost always come on the spur of the moment. New traders should never decide in the middle of a candle because this could have a negative impact on them. Once you use this strategy, you will be able to see firsthand how you are a victim of rash trading decisions. Make decisions candle by candle if you want to manage your emotions while trading.
- An excellent way to prevent making irrational choices is to make a list of all the entry requirements. Make a list of the requirements for entry and keep it handy. You can develop mental discipline thanks to this.
- If you don't have faith in your system and abilities and follow a consistent strategy in everything you do, not just trading, you won't get close to success. After being explicit and clear about your trading strategy and rules, move on. Our best guidelines may change if we allow outside opinions to sway us. That must be avoided at all costs.
- Opinions are significant, but only if you do your research and are aware of all relevant factors. The fact that it seems interesting alone does not make it reasonable to rely on it. Relying on other people's opinions can occasionally be harmful when it comes to trading. You should refrain from listening to other people's opinions if you want to trade confidently.
While a lot of our unsuccessful trades can be attributed to our inability to control our emotions, not all losses can be attributed to this.
Nevertheless, if you can keep them under control, it will be simpler to identify other issues and move forward.
Although it can be challenging to overcome your ingrained tendencies and responses, with enough effort and practice, you may be able to control your emotions when trading.