Like many others, the reason you have chosen to have a go at trading on the foreign exchange market is because you want to make some money. But to do just that you have to leave your emotions at the door, as emotional trading is likely to leave you making more losses than gains. Yes, there are plenty of times in life when following your intuition or going with that ‘gut feeling’ can help you, but forex trading is not one of those times!
No place for emotions.
Regular traders on the forex markets are often the first to say that trading is the worst place to be led by your emotions as an emotional attachment to a certain trade will usually always end up going wrong. The best way to get ahead in trading is to choose the right trading strategy for you and stick to it. Whatever system you use when trading it is likely to follow the facts and only the facts, such as highlighting the best currencies to go for, when to buy them and when to trade them, etc. Only by sticking to your system will you make successful trades and hopefully make a profit. As those with trading experience know, when you compare the fact based system against your own gut feelings, the system is nearly always right.
But staying unemotional isn’t always as easy as it sounds, especially if you are new to foreign exchange trading and the excitement that comes with a successful and profitable trade. Your fact based market analysis will show you that the forex market, like many others, will move unpredictably at times ? but these are the exact times when you need to keep your wits about you as your emotions could easily take over. Try to avoid getting caught up in the excitement of a trade increasing in value or the panic trading of a currency dropping, especially if your rational trading system says it would be better to stay put!
Take a break!
One secret to staying unemotional during your trading is to take a break from watching the charts all day. Watching the changes all day, every day as they happen can lead to your getting too involved. Instead take a step back, look at an overview of the day’s action and think rationally about the changes that have taken place and what they mean for your trading. Keep your head and stick to the numbers and you will hopefully have a successful experience trading the foreign exchange markets in the future.