Welcome back!In this issue we will discuss Fear, Greed, Revenge, and Carelessness.Let’s get right to it…………………
Fear:
A feeling of agitation and anxiety caused by the presence of danger. A sickening feeling of losing money.
The most common anxiety in trading is, FEAR OF LOSS. Fear actually distorts our perception of our trade. By following our trading system you have the ability to deal with fear. Our system works, trust in it. As stated in the movie Field Of Dreams, “If you build it they will come”. In other words, “If you follow the system, the PIPS will come”. Understand that “ALL” good trading systems still experience some sort of losses. It is just the way it is, deal with it, understand it, and you will become a better trader.
Greed:
An excessive desire to acquire or possess more than what one needs or deserves. The irrational and desperate hunger to make more money.
I will tell you right off the bat – The days I lose on trades are usually because I was greedy. Huge profits can be achieved in the FX market in a short period of time. Fortunes appear to be just seconds away. Greedy traders vision unrealistic returns. Greed will rear its ugly head while you are in a positive trade. Simply put, we want more out of a specific trade so we convince ourselves that the market will continue to move in our direction. “JUST ONE MORE PIP AND I WILL GET OUT” Always – Always – ALWAYS – Be on the lookout for greed. Never think you are immune to it. Put notes on your computer such as, say it with me, PIGS MAKE MONEY – HOGS GET SLAUGHTERED!!!
Revenge:
To inflict punishment in return for a loss you suffered.
When you lose on any trade, it is a natural emotion to feel “revenge”. At times you will feel compelled to try and get your lost money back. This will make you lose sight of your money management techniques which will crush you long term, and sometimes, it can crush you short term and empty your trading account. NEVER seek revenge because the Forex market ALWAYS has the last say. Do not try to recapture losses all at once, it will only hurt you. Bottom line: Trying to get back losses without using a proven money management system is a “HUGE” mistake.
Carelessness:
Taking insufficient care. To be negligent. Lack of forethought or thoroughness.
When we experience a large profitable trade, OR, a big losing trade, we may become careless with our evaluation of possible upcoming trading situations. With a series of winning trades we feel invincible. We feel that we have mastered the market. But all we have really mastered is how to become a “HOG”. What do hogs get? SLAUGHTERED!!! Being over confident leads us to pay less attention to our goals, money management, and our trading system. When we have some losing trades in a row we tend to become reckless and want “Revenge”. Remember our old friend “Mr. Revenge”. When you become reckless, when you become careless, step away from the charts and come back later with a clear mind-set. Stepping away from the charts will make you a better trader long term.
Later this week we will discuss winning attitudes for success.
Tags: forex, Forex Confidential, Forex video
