Learn How to Control Your Emotions When Trading Forex

If you are new to the world of trading and is still a learner, it is quite possible that you may have not traded large sums of money which,if results in a loss can be a huge dent on your bank account. You might have seen movies in which traders invest millions of dollars with a smirk on their face, well real life certainly is very different from the movies we watch. When making big trading decisions in the real world a trader has a lot at stake which includes his money, career and future and the fear of losing it all, rightly so brings upon a trader a lot of emotions that include fear, anxiety, greed, etc. Which might make him unable to focus and affect his decision making abilities. These emotions can sometimes get the best of a trader and if not controlled can be the reason for his downfall.

Why controlling emotions while trading is important

Controlling your emotions is one of the most crucial skill you must learn before you start trading, many people out there in the trading world do not have this skill even after years of trading experience but worry not because like any other skill controlling your emotions can be learned. While trading you might have to make crucial decisions that might affect your bank and your life in many ways, this decision making on a daily basis makes you much more vulnerable to bad decisions and after you make one or two bad decisions you get overwhelmed by emotions which further leads to you making evenmore bad decisions, other than that a lot of traders in the forex market get overconfident after getting consistent profits in a row because the emotion of greed overtakes them, which results in them overtrading and losing all the money they had gained. Success in the forex world is all about the decisions you make and it is very important that you make the right decisions at the right time, which is only possible if you get a hold of your emotions. You might have a lot of questions regarding controlling your emotions, well worry not because we will walk you through tested tricks that you can and should use to control your emotions while trading.

1-Take a walk after a trade

When you make a trade, a lot of questions and fears regarding the trade starts to fill up your head that can make you nervous and affect your productivity and performance, to tackle this, it is always a good decision to step away from the screen and go out for a walk, its better if you walk in an open space like a park or a just a stroll down the street. A break from looking at your computer screen will help your mind and body to ease up and will surely make you feel much better than before. It is also scientifically proven that people who take walking breaks between their work are much more efficient, active and better at decision making than those who don’t.

2-You will lose some money and it is okay!

Losing money in trading is natural, just like in life, in trading sometimes you win and other times you lose but a successful trader always learns from his losses. You should understand that in trading profit and loss are natural partners you will sometimes face small and big losses but you shouldn’t let the loss affect you in any way because once you do that, it will mess up with your head and will lead you to making more bad decisions.

3-Only trade money you can afford to lose

The main reason many traders get overwhelmed by emotions while making important trades is because they put money they cannot afford to lose on the line, and once they do that fear regarding losing it all starts to fill up their head and it can affect their decision making ability. A good way to do this is calculating how much money you can afford to lose and calculating the risk percentage in every trade you make.

4- Don’t trade when you are unsure

If you are about to invest a large amount of money in a trade but you are not really sure if it will be profitable for you or have second thoughts about it, it is better to trust your guts and not make that trade, because your subconscious brain will keep thinking about it and the overthinking carried on by that trade will not let you focus on your work and will further result into you making bad decisions.

5- Stop comparing yourself

A lot people in the forex world are really competitive and always want to be the winner amongst people they know, be it their friends or other acquaintances. You should understand that their day thousand cannot be compared to your day hundred and you will surely grow at your own pace. This unhealthy competition makes a person feel the emotions of jealousy which results in them setting unrealistic goals and they end up over trading thus losing all their money.

6- Setting realistic goals

Many people in the world of forex trading set for themselves unrealistic goals and try to achieve them, which is a big mistake. Setting realistic goals in trading is really important for two reasons

1- Once you set a goal for yourself be it a monthly or yearly goal, you plan your trades accordingly and you then have a plan to move according to, if you are following a plan you will never be nervous about the decisions you make thus not letting fear of loss affect you.

2- After you set a goal to make a certain number of profit in a year or in a month, you will focus on only making that much money thus not allowing greed to affect the decisions you make.