The title of this article is a big question which I ask practically every student I have ever worked with. I guess I even ask myself the same thing from time to time, even though I have been trading the markets for a pretty long time now. We are all human, thus we are not perfect. Our emotions are a quality which make us unique and allow amazing things to happen but those emotions can also get us into trouble now and then too. Emotion is a key component in our make and will often lead us to accomplish great things as well and some pretty bad things too. In trading, there is little use in allowing you emotions to control you, as this will lead you down a steady road to financial disaster if you are not careful. I think we all know this, yet most of us still don’t do anything about it when we trade. It is time to look at why this is and how we can overcome it.
Now, before we go any further, let’s get something straight: Without question every trader active in the markets is trading for emotional reasons. They want to make money which will affect their life in some way, which in turn will affect the lives of others in turn. I would question anyone who said that they were not trading because of emotional reasons. Making money, or not having enough money will have an impact on anyone, so it would be foolish to ignore that fact that there is an emotional reason behind any individual’s desire to make money from trading, because what they intend to do with the potential money they make, will have an emotional effect. However, during the decision-making process of placing or managing a trade, it is vital that those emotions have absolutely no say on the actions of the trader. Unfortunately for most traders, the potential result or outcome of their trading starts to impact their actions right from the very start. We need to leave these emotions at the door from the get-go and apply logic above all else when analyzing and trading the FX markets.
The biggest issue which we face… Continue Reading
