
More money is lost because of emotions in day trading
Forex currency than because of the unpredictable nature of the markets. You see it all the time. It costs you every time you hesitate to pull the trigger. Each time you stay in a trade too long and miss taking
the profits off the table, you simply hand your capital to the markets. In each instance that you exit a winner early and miss the run is another indicator of the high cost of emotions.
“Once bitten, twice shy.” is experienced often in day trading Forex currency. The source of many emotional problems in day trading Forex currency is fear. There’’s the fear that you”ll get bitten again, because it’’s happened before. Exiting your trade too early, hesitating, staying in a trade too long all come from that fear.
Many feelings can influence your decision-making also, like hope, guilt, confusion, pride, anger, greed, despair, shame, anxiety, and a many other emotions. One of the biggies is revenge. Often when you take a regrettable loss that has you licking your financial wounds, there is a part of you that wants revenge. You want to get back at the markets and take back your money. It’’s only human to experience this.
One of the problems is that day trading Forex currency is an activity that in many respects runs counter to our nature and everything that we”ve learned growing up. In trading, emotions tend to work against you, in their function as part of your survival mechanism. It is un-natural for humans to step into a potentially high-risk circumstance, get hurt (lose money) a significant portion of the time, just accept it, and then ask for more. Self-preservation is our natural response. In day trading Forex currency, you”re trying to deal with the unknown nature of the markets, in addition to trying to assimilate a huge body of knowledge along the way..