How Emotions Can Destroy A Trader

  

From a technical standpoint, I don't believe there is anything more important that a trader can learn than price action. But it doesn't do you that much good if you can't handle your emotions when you trade.

price actionEmotions can absolutely destroy a trader.  The two main emotions that are at fault when a trader is struggling is fear and greed.

How is a trader supposed to handle these kind of emotions?

The most obvious way is to first know what you are doing.  It's a lot easier to control your fear if you can understand what the markets are all about.

This is where price action comes in. When you understand price action and price movement, you can definitely become a more relaxed trader.  The reason is quite simple:  You know what's going on.

However, if you use indicators, this will only increase your fear, just because you really don't know what the market is doing or where the market is headed.

You're sole reason for getting in and out of the trade is on an indicator like a stochastics, moving averages. As the indicators go, so does your trading, especially with forex autotradingThat would make me anxious too. You really have no say, as to what your results will be as its all dependent on the indicator.

I used to suffer through the same fate, and not only was I an unsuccessful trader, but I was also a scared trader.  There is no worse feeling for a trader than when they are too scared to enter or exit a trade.

The fear is justified, because you are basically on emotion.  When there is a severe lack of knowledge, emotion is all that you have left to work with. And when you're trades are fear based, you could imagine how the results will turn out.

It's a lot different when you can look at a chart and simply know what's happening. It's like reading the market as if it was a book. You can decipher the reasons why the price moves in a specific way.

It's no coincidence that the time I learned about price action, was when I stopped getting so nervous about my trades.  I could just relax and open a position with full confidence.

I may not be right 100% of the time, but that's also an important part of the emotional aspect of trading.  It doesn't bother me to take the occasional loss every now and again. Because I used a real strategy, not a mechanical indicator driven forex trading system.


 

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