Forex trader vs Forex gambler, which one are you?
Most traders or people are aware of this statement “THERE IS A THIN LINE BETWEEN FOREX TRADING AND GAMBLING”It really doesn’t have to be like that. Any trader who has been on live Market knows exactly what I am talking about and how the statement can be true sometimes.It is very easy to adopt a GAMBLER’S mentality while trading financial markets.There are a number of contributing factors which can lead a Forex trader to become a Gambler without being aware.But we are focusing on this one big factor which is PSYCHOLOGY
From the day a Forex trader decides to go from demo to live account, things change in so many ways that we(traders) could never really be prepared for.The trades we make become “EMOTION BASED” instead of “LOGIC BASED” we become indecisive about so many things, like when to take profits, or when to cut our losses and whether to enter the market or not, if a trader starts feeling like that, he/she has just discovered the effects of psychology
How Does This Really Affect Our Trading?
It actually “CLOUDS” our judgment while entering the trades. There are two most important emotions that I am sure every trader has experienced in their trading career, these two are:
It can either cause a trader not to place a trade even when opportunities are plenty in the market, or it can make a trader to close good running trades pre-maturely without giving it a chance to actually be profitable, and it can also cause a trader to hold on to a losing trade even when there is no hope for that particular trade, for the fear of being a loser. And as long as one stays in the market, this emotion will at some point affect a trader, in fact, we (traders) all go through it at some stage of our trading journey or career. Any trader who can tell otherwise, I am sure he/she was not trading the Forex market that I know, or they are simply in denial.
This is the most dangerous zone a trader can find themselves. This emotion can cause a trader to make too large or even too risky trades. This is as a result of trying to “score big” or to make massive profits in a short space of time or it can also be just about trying to appear as the best trader. Greed can also make a trader to not close winning trades hoping they can still make more out of it and reach the set targeted profit which is usually set at a very high level.This emotion causes a trader never to be satisfied even when they do make profits. They keep on holding on to a trade until they sometimes find themselves on the “wrong side” of the market, and once that happens, a trader is filled with regrets and embarrassment which then lead to a trader trading, even more, trying to gain back the money.Once a trader starts to feel like that, again I say, HE/SHE has just adopted a GAMBLER’S MINDSET without even realizing it.Good news is, we can beat these emotions just by practicing RISK MANAGEMENT skills.And we can remain in the FX markets for years and years without facing “SUDDEN DEATH” or be ‘kicked’ out of the markets.
Just like any other business whether online or offline, risk becomes part of it, but it should not be an uncalculated risk which can eventually lead to the business closure. In closing, we can all be profitable traders as long as we understand that we never lose but learn, and we focus more on being consistent and getting it right because by getting it right, the profits start pouring eventually. Thank you for stopping by. For private mentorship, you can check HERE. For FSB regulated brokers to open a live account with, choose from my recommended brokers HERE.