Forex lesson#5: Have fun and lose OR be bored and win
Trading Forex with emotions and feelings is fun. Taking positions by instinct brings excitement to trading Forex especially when a trader wins.
Trading by the rules is boring. That’s because a trader knows in advance what and when and how to take trades by following the instructions – a trading plan.
There always was and will be a temptation to go around the original rules.
There is somehow always appear to be a good reason “just this time to make an exception from the rules”… Don’t do that. Be firm.
Many Forex traders come back to their charts every day to analyse the market and find a good trading opportunity. However, not many traders realise that analysing the market does not necessarily leads to trading the following day.
A trader should never take a trade just for the sake of being in a trade and/or just because he has spent time analysing the market today… By conducting market analysis you only keep track of the situation in the market, nothing more than that.
A good trader is a bored trader. He will repeat his routine day after day, following the plan and avoiding any temptations to break the rules.
A bad trader is a trader whose excitement about Forex trading causes his emotions to interfere with his trading plan, more often than not bringing troubles with it.
What type of trader are you?
** Forex Dark Lord **
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Unbelievable… did you just talked about me :)
That’s exactly how I traded… till this day of course.. now I’ll be smarter and switch off my excitement, although it is so diffucult to do.
brilliant
Very nice lesson, indeed… I had not realized just how exciting -yet dangerous some of my trading really was! With these pointers I am sure I will soon be ready to trade real money. Not that I want to rush into things (that I have learned from Lord of Darkness!)
I have not read all of the lessons yet, but from my experience I can say that this lesson reveals the key to success - controlling emotions. The hardest fact about forex is that you will inevitably have losing trades. Most likely a lot of them. What you need to do is develop a thick skin and become completely indifferent to them.
It is incredibly hard to achieve, first instinct you get after closing a losing trade is to get back in and win the lost money. DON’T DO THAT.
Instead, I suggest you try to think about it like this: ok, I just payed for information about the direction in which the price is going. I though it will go this way, but it seems it’s going the other way. That was money well spent.
And do try to pay as little as possible for this information - in other words, keep your stops relatively close. You will make a lot more than what you just lost if you don’t act impulsively and enter another trade based on the information you just payed for… :-)
Hello my lord. Can I sell you my soul in exchange for winning trade ALL the time?
Excellent! I’ll take it…
:)))
Regarding emotions, I’ve noticed this: a big winner triggers euphoria/happiness and a big loser triggers anguish/regret/anger.
Anguish makes you cautious, makes you lick your wounds and think about how stupid you were. You take smaller positions or stop trading for a while. You ‘play it safe’. Euphoria engenders confidence and a ‘what a clever boy am I’ attitude, leading to loss of discipline a happy blindness that leads to stupid mistakes. Your big losing trade is just around the corner.
It’s interesting,is it not, that euphoria is more dangerous then anguish?
Of course, I am far beyond this syndrome now, (said tongue in cheek).
Hey I just stumbled on ur site and I liked it , I liked this particular line of urs..”A good trader is a bored trader” so true … just don’t know how to be like one :)
Hi, Don’t just know how i got to ur site but i find it good for traders, this attitude has seriously dealt with, the problem is that i don’t obey my trading rules so as long i disobey i regret it but thank God i’m alright now. And i will like to tell people that patience is the best tool for forex trading. your post are all good keep it up.
Forex - hah :)
The sure thing you win out of forex is that you will either be able to control your emotions, or finally get that you have to control them. That is a big gain, no matter how many pips and $ you lost. Greedy and pride’y will pay the price :) Hope you get what I mean …. :)))
Drugelis