A trade will always have an outcome, it’s a fact. Regardless of whether the outcome is positive or negative the trader or investor will always have a set of feelings that will come out as soon as the outcome occurs. Feelings are somewhat unavoidable and at the same time are destructive for the trader’s future if not handled and understood correctly. No matter how many risk management manuals or trading strategies you go through it’s the human part of a trader to feel the result, the good and the bad. At the same time a lack of feelings from the trader can be as equally destructive.
It’s not enough for a trader to know all the ins and outs of an effective trading plan but what is also key is that the trader or investor can harness and control their emotions at all times as trades running on emotions have repeatedly resulted in devastating losses.
In the world of online forex trading all traders and investors have at some point come across and were taken over by one of, several or all of the trader’s 5 deadly emotions.
#1. Greed
People in the business are forever witnessing traders and investors falling hard from their high pedestals because of this emotions. The nature of the field makes it understandable and expected that traders and investors are money minded and that’s how they should be if they are going to keep on pushing themselves to reach higher. What is deadly though, is trying to push higher and higher in one day. A success has the habit of making the trader get carried away and seek for more and more, but that is how he or she will eventually stumble into a grand loss. The key to controlling Greed? A daily trading plan. Traders must always set limits for themselves and exercise enough discipline to not break them and stray away from what they had set out for on that specific day.
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