Controlling Your Emotions As A Trader
Trading the markets has seemed a very smart way of making money for the longest period time. But the question arises - why are so many traders losing money in the market? Many traders will tell you that they have the intellectual capacity to make wins, but why then do they lose more?
The problem is that the human emotions isn't your friend when it comes to trading the markets. Your emotions will tend to make you afraid when you should be feeling optimistic, and makes you feel optimistic when you should in reality be afraid. You must conquer your emotions to do well as a trader.
Professional traders will tell you time and again that - you need about 70% of emotional intelligence and about 30% of intellectual capacity to trade and make money consistently. Note that, it's not just about making lots of money on one day, and losing it all and more the next day.
One way you can have better control of your emotions is by trading less. When you trade too big, you feel so much fear. And fear is the most powerful human emotion, and people tend to make their worst decisions when they feel scared. You have to reduce your trading size, in order to control your emotions better.
Another way you will be able to control your emotions better, is by having a fixed exit point. You should always know when you'll get out before you get in. If you don't have a set exit point or target, you'll only expose yourself more to emotions of greed and fear.
Once a trader can control his or her emotions, such a trader is destined for greatness or, let me say making profits. Using emotions to trade always ends in tears
Thanks for commenting.
Certainly, when a trader is unable to control his or her emotions, then loss should be expected back and back again.
Thanks for commemting.
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Hi @thinkbi
Excellent choice of topic.
If you're planning to learn to become a trader, then my suggestion is always the same:
to start by learning about trading psychology as much as you possibly can. And learn how to switch off emotions. Without it you may end up jumping into 'emotional rollercoster'. Which is not fun.
It helps to become as numb as possible. And most of all: avoid even coming close to your laptop if you're angry or happy. Just don't do it :)
That's my life motto.
Cheers :)
Thanks for commenting.