We’re all human and we can all be influenced by greed and fear in our forex trading no matter how experienced we are.
Just last week I was watching a training webinar as part of my continuing education for my Chartered Accountants qualification and there was some discussion about the impending US fiscal cliff. The way they were talking you’d think it was the end of the world as we know it. Since I’m a technical trader I try to avoid the financial news so I was subjected to more doom and gloom market talk than I’m used to hearing.
I didn’t think much of it at the time and tried to ignore it as best I could while listening to the webinar just enough to ensure I could honestly have said I’d completed my full 2 hours training.
I thought I’d got through it alright and as I went to bed that night I checked the situation of my open positions to see where they were at. On that particular day, it would have been nice if they were in better shape. It didn’t worry me in the slightest because my equity curve is great and I don’t win on every trade and don’t need to. If these trades were stopped out it was fine by me as I know I’m trading with an edge. Still, with that said I much prefer winning trades and would have liked to have seen the trades doing better and they had been earlier in the day.
Off to bed I went, exhausted after a busy day. My mind was empty and tired and I was off like a light.
Then the dream began. I don’t usually remember my dreams, but this one I did. In my dream I had a few carry trades open that were suited to a risk favourable market. The trades were going well, and then………………I fell off a fiscal cliff. Well, not me, my trades did.
In my dream I’d been away from the computer and when I came back to check my trades I had huge negative balances in all my broker accounts of varying degrees. I could see the exact numbers screaming out at me in a bold red color. The account balances in red. I’ve never seen that before! I could even feel my heart pounding hard in my chest while I slept. In horror I realized my trades had gapped over my stops massively wiping out my accounts and then some.
Luckily it was just a dream.
Damn that subconscious mind! Subtle things can really play on your mind. You need to be careful about what you let in as it affects you.
For beginner traders the emotions tend to run pretty raw and can be difficult to control. Freezing up and stopping trading as doubt creeps in is common while for others more reckless aggressive behaviors may be taken to “get back” at the market.
As you become more experienced you have a greater trading history to draw on. You’ve seen yourself pull through to greater profits. You know what it takes.
Successful traders have strategies in place to put them in an objective and stable frame of mind for trading no matter what has gone on with recent trading or life in general. These strategies can help traders of all levels make consistent objective decisions and lessen the impact of the fear of losing and greed of winning.
These are the kinds of influences that make sound trading psychology so essential for consistently profitable trading.
What do you let into your life that has a negative affect on your trading?
What helps you regain objectivity to make consistent decisions not influenced by greed or fear?
Have you had nightmares about your trading or lost sleep over it?
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About the Author: I’m Rachel Hunter, TraderRach, a Forex Trader who helps traders achieve the life they love with forex. Be strategic and design your trading business for sustainable success and have fun! That’s my mission. Join many traders’ gaining the edge with “10 Powerful Lessons for Forex Trading Success” plus other goodies. Years of precious learning specially packaged up for you. My background before trading is as a Chartered Accountant and Chief Financial Officer. I know what it takes to make a trading business rock on. It would give me great pleasure to make a difference to your success.