My Two Cents
Desmond, an amateur trader walked up to the Trading Office on Wall Street one Tuesday morning. He greeted the receptionist, Linda, who simply paused what she was doing on the computer. She raised up her head, touched the frame of her eye glasses, and gazed at the young man standing in front of her desk. “How may I be of help to you?”, she asked. “I have an appointment with my mentor, Mr Fred”, Desmond replied.Check Out Other Stories:
Four Key Trading Habits My Two Cents The Trade And The Sniper Bursting Bubble Trader I Blew It Again! Linda picked up the phone, dialed some numbers and spoke briefly with someone on the line. “You may go in through the door on your right”, she said. Desmond walked into Mr Fred’s office, greeted him and sat at his desk. “Good morning sir. I want you to mentor me”, Desmond spoke. “Good morning, Desmond. I will give you five rules”, Mr Fred replied. “I normally give the following rules to my mentees”. “You will feel a lot better with your trades if you can follow the rules”
Mr Fred, is one of the veteran Forex traders in town. He has twenty years of professional trading experience.
He narrated the rules as follows;
“It’s no longer news that most fresh Forex traders end up failing at the beginning of their trading career due to poor emotional trading style.
Follow these five rules if you have problems with how to control your emotions when trading Forex.
1. TAKE A WALK AFTER EACH TRADE:
Even if it’s just for a minute, take that walk. Forex trading, is fast and furious in nature. It is very easy to get trapped in a sea of emotions when trading currencies. Walking away from your trading monitor or screen will serve as a deliberate break in your trading tempo. It will be an important physical action that you take to control your trading tempo. This simple act will help to clear your mind. It reminds you that you are in control. The market does not pull you into a trade. On the contrary, you can walk away from the market any time you want. You are in charge.
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Four Key Trading Habits The Trade And The Sniper Bursting Bubble Trader I Blew It Again!2. FIND OUT THE LEAST VOLATILE HOUR OF THE TRADING SESSION:
Read a book during that particular hour. Most Forex trading strategies work best when price action is rapid and volatile. Attempting to trade in a ranging market may lead to some frustration. Anger follows. Subsequently, you may start to feel emotionally broken. The best solution to this, is to take a break. Remember, the market is going nowhere. You may try to read the latest novel from your favourite author. However, do not read any that is related to Forex trading. Trading books will give you fresh trading ideas, and you might be tempted to try one of such ideas immediately. Fresh trading ideas, before they are integrated into a consistent trading plan, usually end up as failed decisions.3. STOP TRADING AFTER THREE CONSECUTIVE WINS OR LOSSES:
Three consecutive profitable trade wins make you feel like a super trader. You start to think that you cannot lose. You feel are a genius. You over-leverage your trading account. You go further by over-trading on your trading account (by adding more positions than your account balance can handle). On the other hand, three consecutive losses make you feel depressed. Of course, you don’t want to lose. Your emotions get the best of you. You revenge-trade. Basically, when certain events happen for three consecutive times in a row, it will be difficult for one not to get affected by it. Simply avoid this situation, and stop your trades after three consecutive wins or losses.Check Out Other Stories:
Four Key Trading Habits The Trade And The Sniper Bursting Bubble Trader I Blew It Again!4. DON’T LOOK AT YOUR PROFIT AND LOSS WHILE YOU ARE TRADING:
One can hardly think of a figure that causes a greater surge of emotions than one’s profit and loss figure. To most traders, the profit and loss figure is an expression of their self-worth.
Know this, that you are far greater than your profit and loss figure.
If you follow the most important trading rule and have a daily Stop-loss limit in place, you may be protected from severe losses.
By doing this, you do not need to check your profit and loss figure constantly.
Whenever you feel like checking on your profit and loss for the session, try reading your trading rules.
Maintain a trading plan.
Review your trading rules.
Reduce your trading size.”
5. ASK YOURSELF: “AM I SCARED?”:
Fear is an intense and destructive emotion that traders often have while trading Forex. Whenever you monitor your trades, try to ask yourself this question: “Am I scared?” At any point, if your answer is “Yes”. Exit your trades immediately.
Maintain a trading plan.
Review your trading rules.
Reduce your trading size.”