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Throughout your trading career you are going to be subject to four main emotions. It does not matter if you are a 20 year veteran or a new trader on a demo account - you will experience these emotions when you learn Forex trading and your success will depend on your understanding of how you react to those emotions. Most people will try to become 'robot-like' and pretend that they do not feel or are not affected by them. Shrewd and professional traders understand how they react when they are subject to these emotions rather than try to ignore them. They know they are experiencing the effects of their emotions but their professionalism and their previous Forex trading training prevents them from reacting to them.

The four most common emotions are - Greed, Fear, Revenge and Boredom. Below is an insight into each one:

Greed

Just as powerful as fear, greed comes when a trader is doing well - when a trade is winning or after multiple trades have made a profit. Making money, making it quickly or in large amounts will amplify the sensation. Greed will make you over-trade, over-leverage and think that you cannot lose.

This can also come from trading orders that are too large for their experience level but perhaps luckily the trade has gone positive. Greed will force traders to take profits off the table before they should or encourage them to move or remove their profit targets.

Fear

Fear can be introduced in by simply putting a trade on or if the trade becomes negative. A trader can freeze up, panic and not react as they should to what they are seeing happen. If you decide to learn Forex trading this is something you will most certainly experience.

This can come from trading too large a size for their experience level, trading with money they can't afford to lose or trading knowing they don't have the correct skills. It will affect their trade management, their ability to follow the rules of their strategy and their ability to effectively approach the markets.

Revenge

The market does not care about you, know that you just had a massive loss or even know that you just made a sum of money. It does not know or care who you are and there is no one in there cheering for you or worrying for you.

The market simply cannot be bested. All you can do is take what you need, be happy with what you have got and walk away. Regardless of how good you think you are or how perfect your strategy is, you will have losing trades. You will lose money and that is a fact. Revenge trading will not make you any more money, ever.

Boredom

Being a trader should not be for entertainment. Arguably, it shouldn't even really be a hobby. Your Forex trading is a business. It is something that will max you out at times and it is something that will have you sitting around for hours doing nothing. Your trading should have a plan like a business. You should never put trades on just because you have nothing to do. As you have learnt in your Forex trading training, every trade must meet your entry requirements and those entry requirements must be in your business plan.

Wait for your trading signals and only then place the trade. As soon as you have completed the rules of your strategy turn off your computer and walk away. Amazingly, people learn Forex trading in order to improve their lifestyle, to spend more time with the family, to go play golf, to spend time at home. If you are bored then go do something that you want, rather that lose money over trading.

To summarize, trading is 90% you and 10% mechanics. Trading is about how you learn from your emotions, your awareness of your emotions and your reaction to emotions.

If you want to trade Forex learn trading from credible Forex training companies only. Visit our website to find out more about how we train students through our Forex trading training.

By Dragan Lukic