| Emotional forex traders will be tempted to | | | | Mind over matter |
| chase bad money with good, and subject | | | | |
| themselves to even greater losses. | | | | Norman Vincent Peale, Robert Schuller and |
| | | | others have written volumes on the power of |
| Get a Grip | | | | positive thinking. Every single champion who |
| | | | has ever perched atop the pinnacle of his |
| "The sign of an intelligent people is their | | | | profession first visualized himself/herself |
| ability to control their emotions by the | | | | doing so. Visualize success. |
| application of reason" ~Marya Mannesforex | | | | |
| trading is not for the faint of heart, nor is | | | | A good trading system is vital, but you have |
| it for those who are controlled by emotion. | | | | to believe in it - and in yourself - in order |
| Certainly, it is an emotional thing to engage | | | | for it to bring you the success you desire. |
| in an activity of risk and reward with your | | | | Confident traders are successful traders. |
| money. Human nature dictates that when you | | | | |
| put your heart into something as vital as | | | | Here are some steps to take to avoid the |
| your financial portfolio. However, a Foreign | | | | traps of emotional trading and establish |
| Exchange trader cannot afford to wear his | | | | yourself as a successful Forex trader: |
| heart on his sleeve. | | | | |
| | | | 1. Educate yourself. Someone has said, "The |
| This isn't a heart matter; it's a head thing. | | | | woodsman never wastes his time sharpening his |
| Let your heart rule in romantic affairs, but | | | | axe." Read that statement carefully, for it |
| use your head when you are trading | | | | is not saying a smart woodsman just grabs an |
| currencies. If you do not use your head, you | | | | axe and runs to the nearest tree. Instead, it |
| may well lose your behind! | | | | is declaring that the time spent sharpening |
| | | | the axe, is time well spent. Never stop |
| Every successful Forex trader develops, or | | | | learning from those who have proven |
| borrows, or borrows and modifies a system. | | | | themselves successful trading currencies. |
| That system is based on facts, observed | | | | |
| trends, and expected market behaviors. Your | | | | 2. Establish your system. Take the time to |
| system will guide you, informing you when to | | | | develop the system that works for you. Test |
| get into a trade, and when to get out. | | | | it, prove it, refine it…and use it. |
| | | | |
| Fear and Greed: Extremes that kill | | | | 3. Embrace your losses. That's right! Every |
| | | | experience is a good experience when you keep |
| When you lose on a trade - and if you trade, | | | | it in perspective. |
| you will lose on occasion -, it takes a great | | | | |
| deal of self-discipline to get out while the | | | | 4. Eliminate emotions. Keep greed and fear |
| getting is good. Emotional traders will be | | | | out of the mix. |
| tempted to chase bad money with good, and | | | | |
| subject themselves to even greater losses. | | | | 5. Envision success. See yourself as a |
| Greed often compels the emotional trader to | | | | successful Forex trader. |
| try to recoup every lost dime. | | | | |
| | | | There are plenty of times in life that call |
| The other side of the Forex coin is the need | | | | for an emotional response: a marriage |
| to stick with a good trade and riding it to | | | | proposal, for instance. Or the funeral of a |
| its full potential. Fear will cause the | | | | loved one. Or when your favorite team wins |
| emotional trader to bail on a deal | | | | the championship. Those are all fine times to |
| prematurely. You have to be guided instead by | | | | let your emotions take the wheel. The Forex |
| your system. Know how many pips you are | | | | Market, however, is not a good place to do |
| risking and how many you stand to gain. Keep | | | | it. Once you have managed to control your |
| your risk and reward in balance. | | | | emotions and make informed, intelligent |
| | | | trades, you will have plenty of reason to |
| Greed and fear are two very different | | | | celebrate later. |
| motivators, but they each have the same | | | | |
| result: they wreak havoc on the Forex market. | | | | Happy trading! |
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