Trading: why it is important to control your actions, not your emotions.
Success in the Forex market does not depend solely on the system or strategy you use; it mainly depends on your mindset and reaction to market changes.
There are currently many market analyzes and hundreds of opinions available on the Internet. There are hundreds of sites that will tell you how the market will behave next, and they will convince you that their trading strategy is the most winning one.
Being knowledgeable does not mean being a successful trader. Yes, the information obtained will be essential for market analysis and decision-making, but much more is required to achieve success.
Having studied and absorbed all the relevant information, the trader seeks to apply it in practice. As a rule, mastering something new is accompanied by a mixed feeling of interest and fear. In the best case scenario, the trader makes several successful trades and gains greater confidence.
This result will encourage you to place more trades and perhaps provide the basis for more aggressive trading tactics... However, you will quickly understand why over 90% of traders fail.
Being a successful trader and being able to control your emotions requires absolute discipline... that's what we thought until now. For many years, there has been a belief in the industry that traders fail because they allow their emotions to interfere with their trading decisions.
Neuroscientists then conducted a study by studying the encephaloscintigram of the brain of risk-takers (poker players, traders, etc.). They discovered that all decisions depend on the emotions prevailing at the moment. How we feel now affects what we think and the decisions we make.
Moreover, in an attempt to determine whether traders think rationally about each trade or follow their intuition, researchers at the California Institute of Technology assessed brain scans of people while making trading decisions. The results of this experiment showed that most often traders listen to their “inner voice,” regardless of the amount of information they collected and analyzed.
Here's another interesting twist to this story: research has shown that we can only make a few - no more than two - “conscious” decisions in a row. Therefore, sitting for hours in front of charts, tracking every movement of indicators, will not be the key to successful trading.
Experts TradingForex practice and recommend using the following techniques:
1. Avoid visual and sensory habituation by moving your eyes in circles and changing your physical position.
2. Get into the habit of taking a break from market quotes (including the computer). This, in turn, can lead to increased investment.
3. Manage your stress by doing breathing exercises to oxygenate your brain.
In other words, doing short physical activity, such as going to the gym or going for a walk in the middle of the day, or even in the middle of trading, will help boost your mental strength and also help you calculate the most profitable exit point.
In conclusion, the connection between the body, feelings and emotions is undeniable in the decision-making process, so trying to control emotions solely is in vain. The only thing we need to control is our actions. Each of us can experience feelings at any moment, but not take any action in response. Moreover, this happens all the time.
What we feel or experience in our emotional state must be taken as data and carefully analyzed. It would be a mistake to ignore this data instead of learning how to effectively use it to achieve trading success.
When you fail, you need to follow a certain course of action that can prevent the situation from getting worse. The more you practice these actions, the more likely they are to become habits. The tricky part is adapting this into a typical daily routine that will help you be mindful of your activities.