Hanging on to a position just to make a little more profit could even end up wiping out your entire account due to a sudden and steep reversal. GreedĬhasing a “big win” can become addictive. Always get back on the horse immediately, even if it means practicing your skills or testing strategies on a demo account.
Being able to identify this emotion is the first step to overcoming it. A series of losses can intensify fear, and this is only natural. Therefore, when traders act out of fear, they might exit a position too early, cutting short their gains, or hang on to a losing position in fear of missing out on a reversal. However, too much of a good thing can be harmful.
FearĪ little bit of fear is a good thing because it drives us to do better. This is what makes them the seven deadly sins of trading.ĭoes your trading knowledge measure up? Check out our Learn Forex Basics! 1. How do we set emotions aside and ensure objective trading moves are made? The first step is to recognize the seven common emotions seen in this profession, which can sabotage the long-term prospects of a trader.
Emotions can get in the way of sound decision-making. We often see traders repeating the same mistakes over and over again, jeopardizing their long-term trading goals.
