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..
Now, getting your emotions under control, or at least to the point that they don't interfere with your decision-making and to act promptly at the right time can't just be willed into being. Trying to 'force' things only works temporarily if it works at all.
The discipline to act decively will become easy as confidence replaces your fears. But again, you can't force it. You have to develop a specific skill set, including a critical one called Emotional Intelligence - as a trader.
Because most have never participated in anything like trading, it is completely new and subsequently very challenging. In any occupation, to be good at it and have the confidence you need, and like all new experiences, you have to develop the skills for day trading Forex currency. Usually when you start a new job, your employer will train you. The company wants you to do well, so they make sure that you have the skills you'll need. For most traders though, they never get that chance. The toughest way to learn any occupation is to be self-trained and by simply being thrown to the wolves, and this is particularly true in day trading Forex currency.
'Trading Psychology' books have been just about the only help for traders, but most of these were written by Psychologists and not traders. Emotional Intelligence is not a concept though, it is an ability and a skill. Reading only gives you knowledge. Skills come through actions. Your paradigms shift and your skills grow not through acquiring new knowledge, but through experience.
Until now, there has been little in the way of specific training on how to become a successful trader. The trading system gets at least 90% of the focus with most training that is currently available, not how to develop your Emotional Intelligence as a trader. Real trader training is now available through the Trading P.I.T. Club by Inside Out Trading. The training consists of 26 weekly lessons specifically designed to eliminate your fears and give you the confidence you need to trade well, without the emotional influences that can be so costly in day trading Forex currency.
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