The state of your mind determines the decisions you make as a trader. Emotions will be there at any given time, even to a forex trader, but the only trick is knowing how to counter them. How you handle emotions in the trading arena is a major determiner of your success in the long run.
Money is vital to everyone, and therefore when dealing with something that involves money, people tend to be emotional. A funded trader should, however, not be emotional, lest you lose all your savings. Examples of emotions that traders may experience include revenge, greed, fear, euphoria, and so much more. Know how to counter these emotions, and you will be a very pre-eminent forex trader.
It is among the top two feelings that many traders will experience. It comes in several ways in trading, and anxiety can make you arrive at all wrong decisions. It is as a result of a lot of uncertainty in the market, and changing conditions.
It mainly affects the newbies in the industry because they still do not know how the market works. However, you need to understand how volatile the market is. You need to appreciate the fact that trades go the unexpected way at times. Be prepared mentally and hope for the best but prepare for the worst. With this in mind, the emotion of fear will not overcome you as you know anything could happen.
In as much as greed is supposed to be a good thing, it is also very catastrophic. It makes a trader make impulsive trading decisions that they should not have made. When greed overcomes you, the money and risk management policies will be nowhere near your mind.
You will ultimately lose your money big time. Discipline yourself so that you only place trades when it is necessary and not when the market looks favorable at all times. Do not hang on winning positions for a long time aiming to acquire that last increase or fall of the price.
Anxiety or excitement comes along when you discover probably you have made a mistake somewhere. As a forex trader, if you find yourself very anxious, then apparently you broke your regulations, or maybe you shouldn’t have made that trade.
Always observe your arousal levels and consider why you feel anxious while trading. It will let you realize the mistake you have made, and you will not repeat the same error at any other time.
A funded trader may get emotional after another trader has aggrieved them. They may decide to try and prove they are better than the other traders and end up with undecided risk management practices.
When the emotion of revenge overpowers you, prepare to lose money as a trader. The decisions you make will be very irrational, and hence, you will lose a lot. Embrace the fact that in trading, there is winning and losing. It is not at all times that you will emerge victoriously.