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Mouse neuron
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Mouse neuron
I am grateful to Denise Shull of www.TraderPsyches.com for reminding me that the idea that you should “control your emotions” when trading, which has been the received wisdom for as long as anyone can remember, is often actually counterproductive.
Whether we
like it or not, humans are emotional beings. Not only that, human emotions are strong forces. The belief that they can be easily suppressed is more
wishful thinking than fact. Desperately focusing on the avoidance of something
that you have been instructed to avoid, without being given the wherewithal to
deal with the emotions this engenders, is actually the surest way to increase the odds that you will behave in exactly the way you are not supposed to.
But here’s
the really interesting part: according to Denise, attempting to suppress
emotions is also an attempt to eliminate a very useful trading tool. Firstly,
there are emotions that it is very important to have, such as confidence, for
one. Secondly, emotions are the subconscious’s way of processing information -
sometimes, very important information.
So what is
the answer to all this? How do you harness the power of emotions and still
learn to behave in a manner that is productive – like not over-trading, for
example? The answer is you build up experience that allows you to take the long
view, and to have a deep feeling for what it means to think in probabilities.
Omicron Forex algorithmic trading tools, used to study historical price action,
can help. Then you have the confidence to place trades that have a genuine edge,
with a real positive expectation, and to deal with the losing ones that are the
inevitable cost of doing business with probability.
A real
bonus is that, in time, you will be able to spot the price movements that
illustrate that others in the game have succumbed to either fear, greed or
remorse.
Agree with this emotions must be control while trading.
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