Forex: Trading in a state of euphoria
After getting a good profit the trader often want to open another transaction. And he thinks that once took profits, so has the advantage.
How to deal with this condition?
By itself, a state of euphoria is not harmful to the trader. Arriving there, he does not feel any fear or stress, or various other negative emotions, and experiencing the mere state of joy. But, despite this, the euphoria is a trader and a bad influence. Namely, the inability to correctly understand the market and make decisions.
As a result, the speculator will make mistakes and lose money on his account. Euphoria may have varying degrees of influence depending on the situation. The easiest form of it will occur when a trader is in a winning position. At this time there are dreams of huge profits that it receives, closing the deal. However, yielding to the temptation, so a trader can profit for a long time dream of his open transaction can easily become a profitable in the loss-making. And of course, that the blame is himself a trader, who did not have the power, at the right time to close the deal.
This is just one example of a mild euphoria. But things could be much worse when the speculator receives a huge profit for example, the first half of the day. Big profits for the trader acts as a drug. It causes him to commit more and more transactions. And as you probably guessed, these future transactions will be unprofitable due to the opening of at random. Some traders in these moments of time thinking very simply: "I have taken profits. I will tell you one more deal, at least, lose a portion of the profits. " In other words, the profit for them is used as a kind of "airbag". Yes, it's a bit insures deposit a speculator, that's just go on forever it may not. And someday, "safety cushion" can no longer save the merchant.
That's what it is and dangerous state of euphoria. Therefore, to avoid it, the trader can do one of two ways:
1) In general cease trading on that day, as soon as the euphoria begins to manifest itself.
2) A little rest and with a clear head again start to trade. But only if the euphoria passes!
To achieve a good profit can only be a speculator when he learns discipline and nothing else. One must always remember that to lose money in forex is easier than to buy. Compliance with the same discipline will help you lose less, but gain much more!
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Tags: Trading on emotion , Forex and Euphoria
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