A successful forex traders masters a great system manages the money prudently and is in emotional control. For many traders, having emotional control is quite hard, or at least easier said than done.
Nevertheless, here are some tips that can help you get there.
Stick to your plan: Before jumping into a trade, leaving itor changing any parameter, ask yourself: is this consistent with my plan? The old saying of “plan your trade and trade your plan” is always relevant. Are you bending the facts to make your move consistent with your plan? Don’t do that. Are you breaking away from your plan just as a one-off due to significant changes in market conditions? While things can turn extreme at times, breaking away from your plan can lead to a slippery slope. You may feel that you have the right hunch only this time, but these feelings can overtake your strategy.
Count to 10: Or 15, or 30. Before making a significant decision, take a deep breath and wait for a few seconds. This will enable you to take the decision in a calmer manner. It may sound like a not-so-serious trick, but the only way to know is to try it out.
Rethink: Do you have a hunch for a trade? It may be a great idea, but don’t let your emotions take exclusive control of your decisions. Rethink the trade, going over all the details before acting. It may not change the decision to jump into the trade but may keep your plans in order regarding this trade, helping your rationale remain in control.
Log it: We probably all heard the advice to keep a trading journal. But do you really do it? Keeping a journal is very useful in analyzing trades, losing and winning trades alike. Yet it also serves another purpose: arranging your thoughts and laying out the trade plan as you go. It also helps out in separating emotions from logical thinking.
Do you counter your emotions in trading? What do you do to keep yourself in check?
Further reading: Factors Affecting Psychology of the Trader