Forex markets are very unpredictable. However, the major reason why money is lost relates to trading on emotion.This is a routine occurrence that happens every time a trader hesitates to make a move.
Its displayed when someone stays locked in a trade too long instead of raking money off the table. Both instances result in traders giving away potential profits to the markets.
Emotions weigh heavy on your decision making process - anxiety, shame, hope, anger, pride - you’re likely to experience them all. One of the most damaging of all is revenge. You were involved in a long trade only to suffer a huge loss that set you back tremendously. Now you’re out for vengeance, anxious to claim it on the Forex market that took your money. While it’s a part of human nature, this type of mentality can keep you out of the market for good.
Completely taming your emotions may be difficult, but you can manage them to a point where they are not interfering with important decision making. Becoming a successful trader takes discipline and the ability to replace your fears with a calm confidence. Some of the pros have termed this skill as “Emotional Intelligence”.
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