3 Working Ways to Defeat Emotions in Trading

Good day, dear visitors of tradelikeapro.ru! Everyone who has traded on a real account knows that emotions have a very strong influence on trading. We are overcome by euphoria when we win, irritation when we lose, our psychological state becomes shaken, which leads to more and more mistakes... I think you all know that fear and greed prevent traders from making the right decisions. But today we will talk about the very cause of emotional instability. Something will surprise you, with some things you may disagree, but at the very least it is certainly worth familiarizing yourself with the material below.

The cause of emotional mistakes is constant chart watching. Yes, strange as it may sound, constantly tracking price changes exhausts you greatly. Every trader knows the situation when he trades, for example, on hourly charts, but watches the price literally every minute. As if his observation would change something)) The whole point is that we LIKE watching price movement.

Movies, magazines, books, television - a huge number of information sources are designed for the consumption of visual content. A person has developed a need for constant visual entertainment. And since forex trading is also connected with money, as a result the trading terminal turns into a very attractive entertainment machine.

As doubtful as it may sound, that is exactly how it is. Traders adore watching price movement when they have open positions. When there are no orders in the market, then, of course, watching the chart is boring. But everything changes when there are open positions. The price falls/rises, and along with it the profit on open orders decreases/increases - what could be more exciting? Most traders are unable to resist the temptation to take just "one quick look" at what is happening in the market right now and how much money they are losing/winning. Moreover, they observe the situation precisely when there is absolutely no need to do so.

Continuous observation of changes in profit/loss on open trades makes you experience either satisfaction or a decline in mood. And since prices are constantly changing, as a result you very quickly exhaust yourself with these emotional experiences. Well, then the mistakes begin: you see entry signals where there are none, things start to "seem" to you, you close trades too early or, on the contrary, hold on until large losses.... The list of mistakes could go on for a long time.

So what should you do? I am going to offer you 3 practical solutions that can significantly reduce mistakes connected with emotions in your forex trading. Of course, there are many psychological practices, such as NLP, visualization, concentration only on individual elements, and so on. This topic is broad and interesting, and we will certainly return to it later. But now I would like to talk specifically about those ways of solving the problem of emotional mistakes that anyone can apply, and immediately.

I know perfectly well that this is not easy. Trading on daily or four-hour charts is much less exciting than scalping on the minute charts. But by moving to a higher timeframe, you remove the need for constant price watching and thus significantly reduce emotional pressure. After all, you no longer need to check the charts every 5 minutes; it is enough to spend just 15 minutes once a day.

Although many people, even when trading on daily charts, still really like to "check" prices during the day. As if anything would change from their supervision...

Another way to reduce emotional pressure is to set goals for the trading day. You set some target for yourself, say 20 pips a day, and as soon as you have earned those 20 pips, you close the trading terminal and forget about the market until the next day. This practice can be very useful, because you limit the time you spend tracking charts and accordingly reduce emotional pressure. In addition to a profit limit, it is also worth having a loss limit so that upon reaching either of the thresholds, you stop trading in any case until tomorrow.

Perhaps the most effective way. It may seem insignificant, someone will ask: "So I reduce my position and what?", but it really works. Try it yourself. As soon as you reduce the size of your position fivefold (compared to what it is now), all mistakes connected with emotions will immediately disappear. The logic of opening trades, following the system and its signals, timely closing of orders, all this will appear as soon as you reduce the trading lot.

The point is that you stop worrying about the financial side of the issue and direct your mental activity where it should go - toward proper trading.  However, you should not switch to a demo account, since trading on demo is a somewhat different matter, which we have already considered earlier. If you are already trading the minimum lot, then switch to a cent account to reduce position size.

To sum up, it is worth noting that it is both possible and necessary to fight emotions in trading effectively. Just start applying the described methods in practice, and the results will not keep you waiting.