In Forex Trading You Should Never Get Emotional About A Trade
If there is one thing that will affect your Forex trading more than anything else it is emotion. In the film Wall Street, Michael Douglas told Martin Sheen not to get emotional about a stock and, while that it good advice for anyone trading in the stock market, it is absolutely crucial advice for someone working in the foreign exchange markets.
It is very easy to find yourself getting caught up in a trade. You enter a trade because you have a 'good feeling' about it and, even when the market starts moving against you, you hang in there because you 'know it's going to turn around'. Now sometimes of course it will but, more often than not, it won't.
The problem is that you've become attached to this particular trade and your decision to keep your position open is being made on the basis of emotion and because, having attached yourself to the trade, you see closing your position as an admission that you are wrong.
Trading in the Forex market must be driven by the market indicators if you are to be successful and your trading decisions should be based on what the indictors are telling you and not how you feel. That's not to say that as a trader you should operate rather like a robot or a machine, but it does mean that you shouldn't let your heart rule your head.
You may for example have a particular emotional attachment to a particular currency and conduct the majority of your trading in that currency. That's fine. You might even have a feeling that the time is right to buy a particular currency. That's fine too. Where you will make a mistake however is to enter a trade on the basis of your feeling.
If you have a hunch then check it out and study the market numbers. If they tell you that the time is right to open a trade then do so but, if they tell you that the market conditions are not favorably, no matter how you feel about it, you should stay out of the market.
Similarly, if having entered a trade the indicators tell you that the market is moving against you and that you should get out, then do just that. Your heart may well be telling you to 'hang in there' but your heart doesn't pay your bills - the market does.
It's a simple fact that in Forex trading you win some and you lose some and that's simply the way the market works. It's not a question of being right or wrong. The market takes twists and turns which catch out even the most experienced traders and the secret is simply to accept that you will lose in a particular trade but to get out as quickly as you can to minimize that loss and move on to your next trade and, hopefully, a nice profit.
If you follow the indicators you'll minimize your loses and maximize your profits but, if you follow your heart, you'll minimize your profits and maximize your loses.
Source: Free Articles from ArticlesFactory.com
Related Tags: trading, forex, get, you, in, trade, a, emotional, about, should, never
ForexOnlineTradingSystem.info is the ideal place to learn Forex trading and provides information on a wide range of topics including currency exchange rates and the benefits of testing the water through mini Forex trading Your Article Search Directory : Find in Articles
Recent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as
- The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru
- The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of
- Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta
- Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider
- How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take
- How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom
- Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo
- How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb
- Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo
- Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit
- The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla
- Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs
- Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume
- Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look
- Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi
- What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon
- Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter
- Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are