Forex Trading Based On Emotions?

As far as I have learned so far, online forex and stock trading are the only businesses that emotions have the highest and strongest impact on them. Currency market goes up and down based on nothing but the decision of the buyers and sellers. When most traders decide to buy, the price goes up and when they decide to sell, the price goes down.

The same emotion which is the main factor that moves the markets, is also the main factor of losing for retail traders like you and me. We also decide to buy or sell after we analyze the market, but when this decision is against the decision of most of the other traders, we lose. There are several reasons for the traders failure. Lack of enough knowledge is one of them but it is not the most important reason, in spite of what most people think. Most traders already know a lot, much more than what they need. When they keep on losing, they think they have not learned enough or their trading system is not a good system. So they keep on reading and learning more and more, whereas the reason of their failure is something else.

We have already talked about controlling of the emotions, but I believe we still need to talk about it because it is the most important reason of the traders failure. The problem is most traders still don’t know what their emotions are and how they cause them to lose. To know and recognize your emotions, you should analyze yourself before you analyze the market. You can understand and follow the emotions of the market only when you control your own emotions.

How can you find out if you trade based on your emotions or based on the signals that your trading system shows you? You should analyze your attitude, specially when you have a losing position.

If you think that you should take a position whenever that you sit at the computer and if you really take at least one position anytime that you analyze the market, it means you trade based on your emotions. Why? Simply because there is no system that gives you a trade setup everyday and anytime that you turn on your computer. Therefore, if you trade anytime that you sit in front of the charts, you trade based on what your emotions tell you, not based on what your trading system and the techniques you have learned show you.

What is the solution? You should change yourself. You should learn to control your emotions. You should learn to ignore your emotions and trade only based on what is on the charts and in front of your eyes, not based on what is in your mind. In most cases, you think that you are following your system, but in fact you buy just because “you think” that the price will go up or you sell because “you think” that the price will go down. Whereas if you look at the charts carefully, you will see that they are not showing you any direction or signal, which means you should not trade and you should wait.

Waiting is something that most traders are not able to do. They feel guilty if they do not take any position for a few days. They think there is something wrong with them and their trading system. They think the other traders are making a lot of money and they are losing the opportunities. But this is not true. 95% of the traders are losing money. The traders who win are those who “wait” for the trade setups.

You should consider that usually there is no signal in 80% of the cases and so most of the disciplined traders are in the waiting phase, most of the time.

Emotions are the main cause of the traders failure. Most training courses focus on the techniques and trading systems, but it is not hard to find a good and reliable trading system for free. Internet is full of free information that are really invaluable too. You can find so many reliable and strong trading systems for free. Something you can not find over the internet is the ability of controlling of your emotions. A good trading system can make money for you only when you can use it emotion free.

As emotions have been my own problem too and I also lost a lot because of them, the training course I have designed is focused on two main parts. The first part is about the techniques and trading systems, but the most important part is where our subscribers learn to analyze the market and see the signals without any emotion. This is the only thing that moves you from the losers territory (where 95% of the traders live) to the winners territory where only 5% of the traders are.