{"id":1277,"date":"2018-07-09T09:18:14","date_gmt":"2018-07-09T08:18:14","guid":{"rendered":"http:\/\/www.wasteyourtime.co\/?p=1277"},"modified":"2019-10-31T19:41:11","modified_gmt":"2019-10-31T19:41:11","slug":"the-dangers-of-emotional-trading-avoid-that","status":"publish","type":"post","link":"https:\/\/traders-paradise.com\/magazine\/2018\/07\/the-dangers-of-emotional-trading-avoid-that\/","title":{"rendered":"The Dangers of Emotional Trading And How to Avoid That"},"content":{"rendered":"<p style=\"text-align: right;\"><i><span style=\"font-weight: 400;\">2 min read<\/span><\/i><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-1278\" src=\"http:\/\/traders-paradise.com\/magazine\/wp-content\/uploads\/forex-traders-e1531123417991.jpg\" alt=\"\" width=\"600\" height=\"343\" \/><br \/>\n<b><\/b><\/p>\n<p><b>Trading is less a business<\/b><span style=\"font-weight: 400;\">\u00a0and<\/span><b> more psychology<\/b><span style=\"font-weight: 400;\"> from which your success or vice versa on Forex market depends. Even if you have decided to switch to systematic trading, this does not diminish completely the dangers of emotional trading and emotional pressure when you are deciding a trade.<\/span><\/p>\n<p>Often, <i>Forex traders <\/i>have the belief that only a complete absence of emotions can help during trading. Still, fear, uncertainty, greed, hope, faith, regret, and happiness inevitably follow the process of trade and may cause the dangers of emotional trading.<\/p>\n<p><span style=\"color: #333333; font-size: 1rem;\">Combating emotions at the moment when your feelings overwhelm, means ignoring the sixth sense, intuition, and finally insight. And what happens? You have brain fog!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Why? It is known that emotions also transmit the flow of information to us. We are guided by this information, we behave under their influence. But this is given to us to control our emotions and to replace one&#8217;s feelings with others.<\/span><br \/>\n<b><\/b><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_74 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/traders-paradise.com\/magazine\/2018\/07\/the-dangers-of-emotional-trading-avoid-that\/#There_are_many_ways_to_control_emotions_and_avoid_the_dangers_of_emotional_trading\" >There are many ways to control emotions and avoid the dangers of emotional trading:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/traders-paradise.com\/magazine\/2018\/07\/the-dangers-of-emotional-trading-avoid-that\/#Concentrate_attention_to_avoid_the_dangers_of_emotional_trading\" >Concentrate attention to avoid the dangers of emotional trading<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/traders-paradise.com\/magazine\/2018\/07\/the-dangers-of-emotional-trading-avoid-that\/#Physiology_and_the_dangers_of_emotional_trading\" >Physiology and the dangers of emotional trading<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/traders-paradise.com\/magazine\/2018\/07\/the-dangers-of-emotional-trading-avoid-that\/#Understanding_Fear\" >Understanding Fear<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/traders-paradise.com\/magazine\/2018\/07\/the-dangers-of-emotional-trading-avoid-that\/#Greed_Is_Worst_Enemy\" >Greed Is Worst Enemy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/traders-paradise.com\/magazine\/2018\/07\/the-dangers-of-emotional-trading-avoid-that\/#Why_are_trading_rules_and_plans_so_important\" >Why are trading rules and plans so important?<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"There_are_many_ways_to_control_emotions_and_avoid_the_dangers_of_emotional_trading\"><\/span><b>There are many ways to control emotions and avoid the dangers of emotional trading<\/b><span style=\"font-weight: 400;\">:<\/span><br \/>\n<i><\/i><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><i><span style=\"font-weight: 400;\">First<\/span><\/i><span style=\"font-weight: 400;\">, it is possible to change your emotions by concentrating on another object. As a rule, this method is very effective. The thing that attracts our attention becomes real for us. You can consider the suffering of losses, or vice versa, examine the possibility of making a profit.<\/span><br \/>\n<i><\/i><\/p>\n<p><i><span style=\"font-weight: 400;\">Second<\/span><\/i><span style=\"font-weight: 400;\">, by changing your views and beliefs you can change your emotions. Every belief we gain over our lives is, in a way, a filter for us, which is affecting the knowledge of all information. All points of view accumulated throughout life have an impact on the interpretations we receive in our mind.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Finally, the <em>third<\/em> way to change your emotions is by modifying physiology. Change in breathing, mimics, body position, color and speed of our voice, all this has a direct impact on the emotional part of not only Forex traders, but any person.<\/span><br \/>\n<b><\/b><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Concentrate_attention_to_avoid_the_dangers_of_emotional_trading\"><\/span><b>Concentrate attention to avoid the dangers of emotional trading<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The concentration of attention is one of the most important components of our emotional state. The fact that you are focused on the Forex trading process becomes not only the subject of reality but also the acceptance of the facts. All activities influence the interpretation of events and therefore affect our emotions. All this guides our behavior, and decisions get an emotional connotation. In this case, it is necessary to define the priorities: what are you waiting for? Do you think about the possibility of losing? Or expect a profit?<\/span><br \/>\n<img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1279 alignright\" src=\"http:\/\/traders-paradise.com\/magazine\/wp-content\/uploads\/atention-e1531123637502.jpg\" alt=\"\" width=\"250\" height=\"152\" \/><br \/>\n<span style=\"font-weight: 400;\">Those who see only losses are likely to hesitate to invest in the market for too long and may even miss the transaction. But once they decide to enter the market, they quickly earn profits. Trading is an attempt to balance the contradictions. The trader should focus on profit and loss and try to balance them. The trader should focus on the likelihood of his\/her methods and information provided by the market because they are the only ones that are correct and reliable.<\/span><br \/>\n<b><\/b><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Physiology_and_the_dangers_of_emotional_trading\"><\/span><b>Physiology and the dangers of emotional trading<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It has been proven that our body manages our emotions and that emotions influence our thoughts. The easiest and most effective way to change your emotional state is to change your physiology &#8211; speed, and depth of breathing, voice or even your pose.<\/span><\/p>\n<p>Pay attention to your attitude, how you sit, breathe, and whether the muscles of your face, shoulder, or whole-body tense. If you feel sick, you should sit more comfortable. Fully simple physiological manipulation can be an effective way of controlling your feelings.<\/p>\n<p><span style=\"font-weight: 400;\">Control your emotions, this will definitely make you a more successful trader!<\/span><br \/>\n<b><\/b><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Understanding_Fear\"><\/span><b>Understanding Fear<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">When a trader gets bad news about a certain stock or the general market, it&#8217;s normal for the trader to get apprehensive. But at the same time, you must be clever, you must avoid the dangers of emotional trading. <\/span><br \/>\n<img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-1280 size-full\" src=\"https:\/\/traders-paradise.com\/magazine\/wp-content\/uploads\/2018\/07\/fear-e1531123819981.jpg\" alt=\"The dangers of emotional trading\" width=\"250\" height=\"177\" \/><br \/>\n<span style=\"font-weight: 400;\"><a href=\"https:\/\/traders-paradise.com\/magazine\/2019\/05\/stock-trading-beginners\/\">You need to understand what fear is<\/a>: a natural reaction to what they perceive as a threat. In the case of traders, to their profit or money-making potential. Quantifying the fear might help. But you as a trader should consider pondering what you are afraid of, and why you are afraid of it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Yeah, I know! This is not easy, and you need practice, but it&#8217;s necessary for the health of an investor&#8217;s portfolio.<\/span><br \/>\n<b><\/b><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Greed_Is_Worst_Enemy\"><\/span><b>Greed Is Worst Enemy<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">&#8220;Pigs get slaughtered.&#8221; is an old saying on Wall Street.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This means that <a href=\"https:\/\/traders-paradise.com\/magazine\/2019\/05\/worst-investor\/\">greedy investors<\/a> are hanging on to winning positions too long, trying to get every last tick. Greed can be devastating to returns. A trader with greed always runs the risk of getting whipsawed or blown out of a position.<\/span><\/p>\n<p>Greed is often based on an instinct to try to do better, to try to get just a little more.<\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/traders-paradise.com\/magazine\/2019\/06\/mentorship-when-trading\/\">The first instruction is<\/a>: A trader should develop a trading plan based upon rational business decisions, not emotional caprice or potentially dangerous instincts. A good trader should have trading rules and plans.<\/span><br \/>\n<b><\/b><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Why_are_trading_rules_and_plans_so_important\"><\/span><b>Why are trading rules and plans so important?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Before traders feel the emotional or psychological crunch, they need to <a href=\"https:\/\/traders-paradise.com\/magazine\/2018\/07\/avoid-bad-investment\/\">create trading rules<\/a>. That will keep your heads in the right place. You should lay out guidelines based on your risk-reward tolerance for when you will enter a trade and exit it, whether through a profit target or stop loss. The emotion is not part of the equation. It would be also wise to consider setting limits on the amount you are willing to win or lose in a day. If the profit target is hit, you can take the money and run. But if losing trades hit a predetermined limit, you can roll your tent and go home, preventing further losses.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Every single trader should be able to read a balance sheet or a chart. But there is a psychological component to trading that shouldn&#8217;t be overlooked. You have to know how fear and greed can impact trading. That&#8217;s why <\/span><a href=\"http:\/\/traders-paradise.com\/magazine\/2018\/06\/how-is-a-investment-or-trading-portfolio-should-look-like\"><b><i>you should exercise discipline, and develop trading rules and plans.<\/i><\/b><\/a><span style=\"font-weight: 400;\"> Never forget that part of trading.<\/span><br \/>\n<b><\/b><\/p>\n<p><b>If you have any experience with this, let us know. Share it all.<\/b><\/p>\n<p><a href=\"https:\/\/traders-paradise.com\/magazine\/2018\/07\/money-risk-trading\/\"><b>Risk Disclosure (read carefully!)<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>2 min read Trading is less a business\u00a0and more psychology from which your success or vice versa on Forex market depends. Even if you have decided to switch to systematic trading, this does not diminish completely the dangers of emotional trading and emotional pressure when you are deciding a trade. Often, Forex traders have the [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":1275,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[1016,1012],"tags":[75,123,124,125,126,107,127,128,104,129,130],"class_list":["post-1277","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-how-to-master-in-trading-advanced","category-traders-secrets","tag-bitcoin","tag-danger","tag-emotions","tag-forex","tag-how-to","tag-money","tag-pay-attention","tag-portfolio","tag-trading","tag-trading-plans","tag-trading-rules"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why emotional trading is dangerous? 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