Why Every Forex Trader Should Learn To Control Their Emotions

If you have been trading forex for a while you will inevitably have experienced a range of different emotions. That’’s perfectly normal of course. However the key to successful trading is to learn how to control these emotions and make sure that they do not affect your trading in any way.

Let me show you what I mean by highlighting what I would consider to be the three main emotions that you will go through at some point.

First of all there is of course the losing feeling that hits everyone after they are forced to take a loss. No-one likes to lose money but unfortunately it is an aspect of trading that you simply have to get used to because no system will generate winning trades all of the time. The best you can hope for is that you come up with a system that generates more winning trades than losing ones (or that you generate more points from the winning ones than the losing ones).

What you definitely do not want to do is to start chasing losses because this will almost certainly destroy your trading capital. As long as you have a tried and tested trading strategy in place, you just have to be patient because you know that it is profitable in the long run.

A second emotion is the complete opposite, ie the wonderful feeling you get when you bank a profit and see your account grow. Now you may think that this is a really positive emotion, but this too can have a negative impact on your trading. This is because many people will start increasing their stakes and risking a greater percentage of their capital per trade in order to try and generate even more profits. However this overconfidence will also lead to disaster in a lot of cases because one or two losing trades could destroy your capital when using bigger stakes.

Finally there will also be times when the market is very quiet, and therefore not generating any decent set-ups for you. This can be dangerous as well because it’’s all too easy to open a position just for the sake of it when you are bored. However trades that are based on gut instinct do not often come good, so you need to remain disciplined in these situations.

So the point I want to make in this article is that if you are serious about becoming a profitable currency trader, you have to learn to deal with your emotions. If you are not a disciplined trader, then I”m afraid you are unlikely to become a successful trader in the long run.