Greed And Fear - Forex Trading Demons Or Pixies?
People who trade will typically view greed and fear enemies. There are, however, some very great aspects of these two emotions. It is important that we as people who trade identify the methods the emotions affect how we trade. Then we can learn to hedge against the negative and leverage the positive. So let’s take a moment to identify the positive and negative methods in which fear and greed affect our trading.
The Negative side:
- Fear makes us want to stop on our wins, fearing we will lose our profits.
- Being greedy makes us want to ignore our money management regulations and exposes our portfolios to the possibility of catastrophic losses.
- Fear makes us want to sit on the sideline, and not make a good trade, although the opportunity matched our criteria.
- Fear will lead us to get rid of our stop loss and keep going in a losing trade, hoping for its recovery.
- Greed will cause us to force trades, going against our rules.
- Fear will convince us to cease trading, believing we will never be profitable.
- Greed will make us want to make a trade when the market is moving, because we do not want to miss the opportunity, although it violates our rules.
The Positive Side:
- Greed keeps us in wining trades.
- Fear makes us want to stop our losses short right when we know that the trade isn’t going in the right direction.
- Greed makes us want to keep the trade going when we are feeling that its going to turn out good.
- Fearleads us to always use a stop loss.
- Greed will help us fund an account, although we messed up the previous one.
- Fear of losing our shirts inspires us to put in the effort and time necessary to develop a good plan of trading.
- Greed gets us into the Forex market, and keeps us there.
- Greed pushes us into trading according to our rules.
- Fear and greed make us become stronger traders.
Fear and greed may destroy our profits, they can make us want to become better traders. Look at the list above and decide in what ways fear and greed affect you and the decisions you make. Capitalize on the positive and seek to eliminate the negative.
JARED PASSEY has worked with hundreds of people trading foreign currencies around the world, has created several successful high probability trading strategies, trades professionally AND manages a forex fund. Learn forex trading at Jared’s free weekly online forex trading seminars that are open to anyone interested.
MOST VIEWED POSTS
-
Forex Day Trading- Two Step Trend Analysis
If you approach forex day trading by just looking at the 5 minute and 15 minute charts there is a strong possibility your account will evaporate sooner rather than later.
In order to get a feel for the market and an indication of the current trend it is necessary to do an analysis by looking at [...] -
Forex Widening The Broker’s Spread
Brokers in the foreign exchange (FOREX) market are paid with the ?spread?. The spread is the difference between the ask and the bid price of the currency pair. Sometimes this spread widens, causing the brokers to receive more as compensation and the trader to receive less from their trading profits. Why does this happen and, [...]
-
Foreign Currency Trading: F.a.q. For Travelers.
Order foreign currency in advance online.
Get your currency needs managed in advance. Many airports, railroad stations, bus depots, and other points of entry have no currency exchange. When currency exchange is available in airports, lines can be long and rates can be “sky high.”
Aren’t US dollars accepted everywhere?.
In the majority of countries, including all [...] -
Forex Trading Strategy - 3 Major Ways To Improve Your Trading Skills In Forex Trading
If you are trading forex as a beginner, or if you have been trading for some period of time but have not been a consistent profitable trader, then it may be necessary for you to take a pause in trading and to reconsider and review your forex trading strategy with the primary objective to improve [...]
-
Forex Trend Following - The Basics For Making Huge Profits
If you look at any currency charts you will see long term trends that last for months or even years and these can be worth $10 - 20,000 or more.
Many traders pick the direction correctly get stopped out and then see the trend make huge profits and there not in!
So how do you catch [...] -
Forex: Trading Terminology Explained
Whenever a new discipline is undertaken, one of the most basic factors for success is familiarity with the terms utilized by those practicing in that area. Trading in the foreign exchange (FOREX) market is no exception. This article will help new traders understand some of the terminology common in the FOREX market.
While this is not [...] -
Best Sexual Positions - From China For Increased Satisfaction
If asked, most people would say the classical guide to sex was the Kama Sutra. Not so.
In China about the same time as the Kama Sutra, the Chinese classic, The Golden Lotus was written by Hou Hui.
The book itself is sexually explicit and describes a man?s action with two concubines, as well as his [...] -
Standard Deviation - An Essential Tool For Forex Trading Success
Standard deviation is a concept all fore traders should understand, as it will give you a greater edge in your quest for forex trading success.
If you want to understand it read on and find out how it can make you a more profitable forex trader.
Standard deviation is logical and will help you time entries [...] -
Make A Fortune From Forex Trading?
Trading is a tough business. You need to either have or can cultivate the competitive edge to survive and succeed in the forex market. Fact: Trading is difficult. Trading is ruthless.
First, some basics:
What is Forex Trading?
Foreign Exchange Trading, or Forex Trading, is the financial market of the world. Forex consist of selling and buying [...] -
The Advantages Of Forex Trading
Forex currency trading is quickly become the most popular method of investing in a particular global market. Forex trading is basically the buying and selling of currency in order to make a profit, but it is a lot more complex than it actually sounds. An individual must keep up with market trends and strike while [...]
-
Forex Trading: Learn How To Read A Forex Quote
Forex is an abbreviated name for “foreign exchange.” The Forex market is a non-stop cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Euros for Japanese Yen.
The value of your Forex investment increases or decreases because of changes [...] -
Moving Averages: Use Them Correctly For Bigger Profits
Moving averages are used frequently by forex traders and are a useful tool if used correctly.
Many traders however don?t know how to use moving averages correctly and lose.
Here we will look at their advantages and disadvantages and how to apply them correctly.
There purpose
Moving averages (no matter what period is used) all have the same [...]