I know what you always tell yourself as a new trader. “I will deposit $10 to my trading account and use it to make hundreds of thousands of dollars in a single trading session then retire to Zanzibar to live happily ever after.
No leaving until I make $10,000.” Well, that is okay to think of, but it is never as straightforward as you can imagine.
Not only newbies are caught up in such scenarios but experienced traders too. Especially when trying to compensate for losses made on previous trades.
I can almost bet $1000 that there is an experienced trader somewhere who’s lost $100 and is thinking, “I need to recover this money then I will be out of the markets. Until later.”
Then he trades another $100 position and loses.
Those inner voices are commonplace in the minds of almost all traders.
Emotions force use to think; recovering, doubling, *** wtf?
Then you ask yourself, where do you strike the balance? When do you say you’ve lost enough and it is time to let go?
When do you say, no matter the losses, I live to fight another day?
Those are crucial and very important issues to handle in Forex and FTT trading. If you do not handle them, you will keep on staring at losses in exhaustion.
Do you understand the pain of losing consistently and at the same time you feel so very tired (Physically and emotionally), especially for being in front of the computer the whole day?
Sometimes you wish you never logged into that account or better still, did something better with that capital.
By handling Trading Psychology, you will learn where to draw that subtle line between enough is enough and I have earned enough for the day.
Learning trading psychology will give you the courage to exit the markets no matter the circumstances you find yourself in while trading.
Trading Psychology and when to Stop Trading.
When trading in Olymp Trade, be objective.
In the first scenario we mentioned that a newbie will want to make thousands of dollars overnight. Realize that getting rich is not an overnight event. Common emotions like greed, fear, excitement, and hope influence to a great degree how most traders behave.
You can take this to the bank – greed, overconfidence, and stubbornness will only make you preyed on by the market.
Understand yourself. Your concentration span, strengths, and weaknesses, and that way, you will avoid many losses.
Are you one of those traders thinking that trading is a way to make easy money?
Then you need to realize that such is greed. It will result in you wanting to enter short term trades and expect money to flood your account within minutes. Such is an instrument of destruction – You are soon parting with your capital, f**l.
In order to alleviate the effect of emotions and to tame your emotions, you need a clear working plan for each trade you are planning to enter.
If not, you are just betting to gain a lot of money, out of greed. You realize that even when the trade is on, fear grips you firmly that there may be a probability of loss.
As the saying goes, expectations do hurt and that is true even in Forex trading.
You placed that trade and all you expect is a win? What if the trade does not become profitable? Did you stop to ask yourself how much disappointment and anger you can sustain if your expectation is not met?
The expectation and hope of making profits on trade can render you out of control of your emotions and that will be risky. Try to compose yourself and know, you might not even win.
Did you realize that it is always so difficult to accept defeat for people who live with high expectations about themselves? Here in Olymp Trade, such also happens. You will find it difficult to accept that loss because you only had so big hopes of winning yet the opposite transpired.
Accept your loss and take it as feedback.
One thing that I can tell you for sure is that successful traders on Olymp Trade do not have an all Wins history of trades. In some instances they lose while in others they win. That is what makes a successful trader.
We mentioned that as a trader you need a clear working plan of your trades and your trading session. You do not need to have your eyes glued to the screen all day for you to make big money.
Do you know how overtrading comes about? Very simple.
The greed in you wants to see your account growing on every trade.
So you trade every other candle because you are drunk in the desire for quick money.
Of course not realizing that this might be the last most dangerous thing you ever do in your account before starting to badmouth your broker.
It might actually be so addictive to see that balance shooting trade by trade
Be careful, most addictions don’t end so well.
The second manner in which overtrading comes is when you have made very many repetitive losses. It is so discouraging to see that account dropping lower on every trade. You would give anything only to see it shoot a dollar higher.
So you lose control of your emotions and fear-cum-greed take the better part of you. You want to profit from every candlestick that comes up. Without noticing, you enter a panic trading spree!!
You are not doing the right thing, whether riding in the addiction to account building or recovering losses by panic trading. Those huge trade sizes you are investing per trade also have a possibility of being consumed in a loss. Actually, most times they never make it to a win.
If your trading working plan dictates that you should spend only two hours a day trading, do not go past that. Stop trading and exit the markets.
If you continue to trade, you are only exposing yourself to much unwanted emotional stress. You will soon lose control of those emotions and find yourself trading in greed or panic. Both modes of trading expose your account to depletion and you will soon lack capital.
Wrapping up on Trading Psychology.
Understanding yourself, your limitations, and strengths comes out as a factor that will help you know when to stop trading.
If your concentration span is short, you would rather stop trading when you realize that you cannot hold any longer.
If you know that greed can really mess you up you need to stop trading once you realize that it’s about that time that greed set in.
Having a clear working plan on your daily trading sessions and every trade you take also comes out as a key factor. If your plan requires two hours of trading a day, whether, by the time two hours elapse you made losses or profits, it’s time to exit.
If you have a clear plan of every trade you plan to enter, you will always not fall prey to temptations of trading every other signal and candlestick that comes up. You will know that you need to stop if you are tempted to!!
What an insight into trading psychology and when to stop trading. Apply it today and you will not have to regret those losses you are regretting right now.
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