As many of my regular readers of these articles may already know, I am a big believer in recognizing the mental challenges which trading brings to us all in the ongoing quest to attain and then maintain consistency. Without a shadow of doubt, we all need to understand that if our head game is off track then our results will completely reflect this simple fact. Two weeks ago in my last article, I spoke of how human beings are hard-wired to seek just a couple of simple experiences in life. Number one protocol is to seek out pleasure and the second protocol is to avoid pain of any kind. Be it emotional or physical in nature, both pleasure and pain are felt and recognized in us all and if as traders we allow our experiences of pleasure and pain to influence our judgment and actions in trading, we will soon find the door of failure slamming firmly in our face.
Emotions and trading simply do not mix. Sure we are allowed to get a little frustrated from time to time or be happy when a particularly big win comes our way. After all, we are only human at the end of the day. However these emotions do need to be kept in check over the long haul, especially when faced with the decisions of when to take a trade, when to not take a trade and also throughout the entire trade management process as well. The biggest problem with the feelings of pleasure and pain, as I explained in the previous article, is they tend to deter traders from maintaining a steady course of action. Trading is a game of consistency after all and those with the ability to be consistent in their actions and planning tend to reap the greatest rewards. An extended string of losses can cause real pain for a trader, resulting in them changing a system which may be perfectly sound in the first place, or vice versa; a long run of wins can also generate such euphoria in us, that we unintentionally get cocky and start to bend the rules thinking we have that Midas Touch, until the market one day inevitably decides to humble us in the blink of an eye.
With such mental challenges facing us each and every day in the Forex markets, we have to be fully prepared at all times and do everything in our power to combat those ever present emotions at every step along the way and remain as objective as we possibly can. As a Lead Instructor with Online Trading Academy, I have the ability to reach out to my growing number of students worldwide on numerous occasions every single week in the ongoing Extended Learning Track online program. During these sessions we not only engage the live markets during trading analysis sessions but we hold… Continue Reading
