trader profession can add the whole car more emotions and experiences into your life. Fear , along with other important emotions, hope and greed move forex market .Due to the fear of losing money, which has an impact on everyone involved in the trade in the forex market, the fear emotion can be called the number one in the trade.
Generally, the emotion of fear is the result of a perceived threat and has developed into a natural defense mechanism in most animals.Our head is responsible for fear the limbic system, which is one of the most primitive parts of the brain.Fear is one of the components of the self-preservation instinct in animals developed and manifests itself in the form of a "fight or flight".It's the same with humans.
Response forex traders to display fear
During trading there are several types of emotional responses associated with fear:
- Fear of failure
- fear of missing out on potential profit
- fear of losing all doom
aboveemotions associated with fear, are reflected i
However, fear can be extremely useful in case of unforeseen situations on the market.As noted VDGunn, one of the most famous traders of the past - "Fear save you, if you act quickly when you realize that was wrong."
Many professional traders acknowledge that use fear as a kind of sixth sense that allows you to get out of the position in time.This applies to situations when there is not worked either take profit or stop loss, but the trader feels that "Something is wrong."Another quote Gann reflects well above "market fear - the beginning of the path to wisdom."
How fear controls forex trading
Have a good trading system, as well as all the necessary technical and analytical tools, is not enough to succeed in Forex trading.Need more correct and mental setup.Which can only be achieved by learning to control their emotional reactions in all possible trade situations.
Most people have no way of knowing how they will react, and what emotions they show up when they start trading.And they have no idea how emotional reaction will affect their profitability.
Another emotional reaction, which may adversely affect the forex trader, includes the fear that prevents the commission of any action, namely, the opening / closing position.This can especially be harmful, if a trader holding a losing position, finds herself paralyzed, unable to close unprofitable warrant, while the market continues to move against him.
This type of reaction can also prevent a trader to open a position when it is not solved, "pull the trigger" and thus goes against its own trading plan and the rules of the system.
Another kind of fear that arises in the process of forex trading usually takes place after the trader has closed losing trade.Because of the loss of confidence in their system caused by previous losing positions, forex traders may be too scared to re-enter the market, even fully aware of the opportunity to return the money lost on the previous transaction.
How to use fear to trade Forex
Basically, when it comes to fear, keep in mind that fear relates almost exclusively to future events.This can take the form of extending the unacceptable situation (retention of unprofitable orders) that can make the current situation worse.
good way to work constructively with fear is to replace them hope, which can be very detrimental to a trader.For example, instead of thinking, "I hope the market will come back", you can replace this idea is much more useful, "I am afraid I will lose more money."Caution in trade does not hurt.This technique is replacing thoughts may well help if you morally difficult to accept (and close) the deal unprofitable.
In general, if you can be disciplined and trade, using a good strategy, and with unquestioning adherence to money management system, fear and other emotions can be easily curbed.Until you "plan your trade and trade the plan", fear can usually be minimized in your trading in the forex market.
P.S.And in order to dispel the seriousness of the text above, I propose to look at the scene of one of the unknown western