3.4.09

Overcome psychological aspect in trading

Emotion
In trading, a good trader should be able to get away from emotion. This is the hard thing.
Just take a look at this example:
Mr. X, is interested in trading forex because his neighbour can make his life only from trading. And he never goes to any office apparently. After some chit chat with his neighbour, he started demoing forex trading. It works. He win more than he loose. He thought that he is ready to start with real money. Soon after depositing, he felt that something goes wrong. He never get a level as when he demoing it. He get frustrated. He aften get out of stop loss. Another day he out from trading too fast. Many times he decides to quit when the price goes against him. After closing his trade, the price bounce back to the previous direction. Mr. X thought that the price played with him. One month after, his account was gone.

It is what happened in most trader. Me? Yes.
Knowing our real money was going decrease affect us directly. It is normal. But when we can not consider and moreover not able to apply our own trading system, it will push us to disaster.
In my beginning day as trader, I wanted to run after every price it goes. And it ended in losing streak.
Then I introspected myself. Trying another aproach. I know that when I am seeing the price most of the time, I am affected directly. So, I move to higher timeframe. Deciding my trading based on longer timeframe such as H4 and daily. It makes me having advantages. I have many times away from seeing my chart. I only look at the chart early in the morning. When I see that there is a signal, I open a trade, calculating where the stop loss is, then closing my chart then go to somewhere doing something else. Tomorow I will take a look at my chart again early in the morning. If it goes into the right direction, I move my stop loss, then leave it to gain some more pips. The trade can last for days. Signal generated just once or twice a week. So it is a good way to me to overcome emotions in trading.

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