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The downside of emotions in forex trading

We are going to talk about feelings today. Don’t worry you are at the right place, we are still talking about forex trading. All this time we have been discussing the factors that affect forex trading. But one aspect that we haven’t touched upon is the psychology of a trader. The mind-set of an investor while trading is just as important as all the external factors we have gone through so far. In some cases, even more.

Your strategies, plans, market research, indicators will all be for nothing if you don’t have the emotional discipline to make the trade. Emotions run high when you have to make a call and real money is on the line. But if you are letting your personal sentiments make the decisions for you, then it’s called emotional trading. And that doesn’t look good for your trading endeavour.

Trading certainly comes with its own set of risks, we don’t need to add our volatile emotions to the mix. Fear and greed don’t exactly inspire rational decisions. But how exactly do you overcome these sentiments? It’s not like there is an emotion switch that you can turn off. So we do the next best thing, limit their influence on our trading as much as possible.

That’s why having a trading plan is so important (We already told you that). So that you have a set of rules in place and don’t end up making rash decisions in a market frenzy. Sounds like, plans are both the symptom and treatment for emotional trading.

Following a trading plan is not as easy as creating one. And it definitely won’t come easy to novice traders. It will take a few trades before you are at ease with your emotions. And when greed and fear are not making the decisions for you. So till you reach that stage, risk only what you are comfortable with and stick to the plan as much you can.

Risk Warning:

This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. Trust Capital TC Ltd does not take into account your personal investment objectives or financial situation. Trust Capital TC Ltd makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by an employee of Trust Capital TC Ltd, a third party or otherwise.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.48%of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trust Capital TC does not offer Contracts for Difference to residents of certain jurisdictions including the USA, Iran, and North Korea. Please consider our Risk Disclosure.

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