The greatest emotion – fear and greed


It took a few months, as the last time we wrote something. During this time, I was watching the market movement and doing all that we expect from them. We expectantly watched how the market will react to the issue of US financial and other breakage. We watched the news reflect the different events around the world; both good and bad. I also had the opportunity to witness some of the novice Forex traders who are trying to make sense of it all. There is one thing that I've seen again and again. Beginners usually sell your heart, not the head.

The key word in this lesson – Emotions. Forex trading is always full of them, the movement in the Forex market are many times based on them. It is obvious that some traders are guided by emotions, trying to buy or sell, and how it sometimes overwhelms their plans. A common question I hear on the market: "Why did I ever do this or do that?"

I used to ask myself, what makes us enter the market, if we are not ready to enter the prices, which do not agree with our plans. I can not say that I know all the reasons why many of us (all beginners) do it, but I would assume that there are two main reasons. These two reasons – greed and fear.

Greed comes when the market is going as we expected then, quite naturally, we want more! We somehow get the idea that it will last very long. Perhaps the laws of physics are not quite drowned – "that will grow …" For some reason, we seem to have forgotten that with time, everything changes.

It should be remembered that in order to successfully carry out trades, you will need a good strategy and discipline to execute that strategy. Regardless of how it is good, trade is absolutely useless without a proper disciplined implementation strategy.

Fear comes when we realize that there is a profit, and we really miss him. On another occasion, fear plays a role, if we consider that, depending on how can we trade, we begin to be afraid of losing money. I learned that as long as we do not learn to dominate the fear and greed, our results will be very unstable. The worst thing is that my greatest concern for new traders – so if money management is not strong, a lot of emotional traders will soon be left without money – long before they have even been able to establish itself as a legitimate traders.

So my advice to you as a beginner or advanced trader, is simple; do not let your emotions control you. In the halls of successful trading in Forex is no place for people who can not dominate their emotions – especially fear and greed.