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Can you control the emotions in forex trading
Written by: PaxForex analytics dept - Thursday, 14 July 2016 0 comments
Emotions are part of human nature. They may manifest as positive or negative feelings. Since a trader is first of all a human being, emotions can interfere during the trading. It is essential to learn how to handle them to prevent they constitute an obstacle to your success. The truth about forex is that it can be an intense and stressful undertaking that requires a strong control of your emotions.
The key to making money in forex trading is to avoid emotional decisions and to follow a carefully thought out strategy that takes the current market and history into account. The forex market is a highly volatile market where emotions tend to run high. Emotions can influence your trading decisions, unless you have a strategy planned in advance, and stick to it, no matter what you think you are seeing at the moment.
The unfortunate fact is that the vast majority of beginning traders fail, and that the main cause of the failure is lack of emotional control and mental discipline. In many cases traders does not even reach a stage where a good
knowledge of economic data and statistics can support their trading to generate better results. Clearly, seekers of success in trading must devote a lot more energy to perfecting their skills of psychological control.
The four emotions that traders suffer from most often are fear, hope, greed, and regret. You need to suppress these emotions to be successful. To achieve this success, you need to learn how to control your emotions, or how to eliminate them. If you manage to understand human psychology and what motivates buying and selling decisions, you will be able to position yourself ahead of the action. This way you can anticipate profitable trade setups.
The first theoretical rule associated with the control over the condition gives insistent recommendations to stop deifying impulses. Dependence on feelings and following continual cravings lead to the loss of the ability to control the situation. A person becomes similar to an animal and begins to act instinctively. The second theoretical rule recommends to develop the awareness that helps control emotions in forex and in life.