Trading emotion is an important thing in any financial market, this is one of the important backbone of every trading system. Emotion in trading would be more dangerous for a trader if he or she does not know how to take action during an emotional approach. Look so many trader’s are good in trading strategies it does not matter what you are using, or what kind of trading techniques you have, even you can do trade with word’s number 1 trading strategy. But the lack of a trading mindset or a victim of emotion trading would not be able to get consistent successful life in a financial market.
The question is still that what is emotion in trading?
As we know that the emotion is related to our personal feelings, whenever we make an decision in our life then sometime it does impact our life emotionally which is normal, because the human is an emotional being. We can get emotional in so many ways, same like this trading we can have emotion in our trading as well. Whenever we have emotion in trading it does affect our trading decision and we do so many continuously mistakes due to it. Emotion mostly takes place when we have a wrong trade in forex, stocks, or any other financial instrument.
99% of world financial market trader’s lose money because they does not know that how to do deal with the trading emotions, the reallity is that it can take a very long term time to make ourself that much capable of building a strong mindset in trading. Its not so much simple to remove the trading emotions from your mind and business.
How emotion affect our trading?
The simple answer is you will lose everything if you have emotion in trading, actually emotion affect our trading deeply and it would not let you run away until you don’t have a margin call and stop out in your trading. Lets take an example suppose you have placed a trade and it went in a wrong way, so it would give you a little bit pain and emotion because you lose your money in trading right?
Because most of us believe that losing money in trading means the end of trading career right? Lol yes most of us have that thinking and we mostly do trade in wrong way whenever we have loss in trading. On the other hand professional forex trader’s have a solid trading system in which they have a strong mentallity or mindset which helps them to solve out the issue of emotion in trading. Whenever a trader has loss in trading he or she look foward to regain that losing amount and trader start’s to take a high amount of risk to recover the old trading loss. Keep in mind that whenever we follow this approach, its bring more disaster in trading because in reallity we start’s to work against the important trading, because increasing the risk doesn’t means the solution. So the question is how to build a strong mindset or how to sort out all these trading emotion’s hurdles while trading.
There are so many important steps those we should follow in trading so that we can make our self a trader like a professional trader. Trading with emotion is the main cause of our loss and if we have a strong approach of trading mindset 70% of success would be in our pocket. Lets have a look on those important trading steps those we should follow in our financial market business to avoid emotion’s in trading.
Make sure that you have a solid trading plan in your business, most of time while trading we don’t have a trading plan, we don’t know exactly what to do or how to deal with the market when there is a loss which create the problem of emotions in trading. We have to be make sure that we have a solid plan so that we can do important changes while emotion’s start’s to build in trading
Trading with proper management would be essential to get handsome trading result in our business. If we have a losing trade in forex it doesn’t mean that we are a loser or we have to use higher risk, keep in mind that our risk should be 1% to 2% max each trade so that we will not lose a big portion of our trading capital durng a loss. Risk management and money management both should be applied wisely.
High quality of trading strategy:
Yes, you need a very high quality of trading strategy and you should have a well enough of trading experience and skill to utilize it properly while trading. You will able to build a strong mindset if you have a good belief in your trading system and trading strategy is one of the important part of it. For example if you know’s very well that you will able to get 70% of trades in your favour then you don’t have to worry about the emotion because you know very well that this kind of pattern or activity is happening in the market time to time.
Testing of a trading system:
This is also one of the important thing that you have to follow to build a strong mindset, make sure that you are not rushing to earn in financial market, because most of time we just start trading for fun and most of newbies are so much excited to check this business practically, but there is a proper system that you should follow so that you can do trade wisely in a real trading market. You need a solid trading system and for that you have to spend couple of month’s to test its trading result in demo account. Or even if you want to go for the real account test your trading system in cent account. Financial market trading is a business of trading probabilities you don’t know exactly when you gonna be right and when you gonna be wrong. You have to test a solid system so that you can get some confidence to do trade with it.
Financial market is one of the risky market hence so many trader’s are also getting advantage from it and they are enjoying their successful trading career in this market. But for building a solid trading mindset we have to give proper time for our learning, patience is required to get a good mindset. Its not a short term process but a long term experience and an well established trading system would make you capable of a good mindset trader in this industry.