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Your FOREX trading potential can be predicted by looking at your daily emotional behavior


abdulla1

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As hundreds and thousands of articles have been written on the subject of trading the markets, and with the emergence of new financial instruments every day, I feel compelled to put together a dissertation on the most important element of trading, the emotional effect.

 

Before detailing the key elements, I will offer to you the thoughts of two prominent individuals. They do not need any introduction, as their work is known and appreciated all over the world. I am sure you will love their insight into the human psyche.

 

"When dealing with people, remember you are not dealing with creatures of logic but creatures of emotion". Dale Carnegie (1888-1955)

 

"Let's not forget that the little emotions are the great captains of our lives and we obey them without realizing it". Vincent Van Gogh (1853-1890)

 

In a world apparently dominated by logic, it is very interesting to find such "heretic" ideas. There is nothing more debilitating than the thought of us acting not on our heavily trained conscious, but rather on the unknown subconscious impulses.

 

I would like to add just one more fact to my presentation, in order for you to fully grasp the importance of this new approach to trading and in general to any business activity.

 

The Institute for Health and Human Potential, with offices in U.S.A., Canada and Australia is a research and learning organization that uses Emotional Intelligence to leverage performance and leadership. Fortune 500 companies, the world's top business schools, professional athletes and Olympic medallists seek their expertise.

 

According to their studies, "Research tracking over 160 high performing individuals in a variety of industries and job levels revealed that emotional quotient was two times more important in contributing to excellence than intellect and expertise alone"

 

Shocking? Not at all. It is our way to act on impulse, without questioning the triggers. .

 

It is well known already that the two emotions dominating trading are GREED and FEAR. What is less grasped is the extent to which these emotions influence our decisions.

 

While amateur traders are greedy when they lose and fearful when they win, professional operators have an exactly opposite attitude, being fearful when losing and greedy when winning.

 

While simple psychological training could help you discipline your impulse reactions, it is the experience you get "in the ring" that makes you understand how to play with these primal emotions.

 

We all hate to lose, not necessarily money. The sentiment is very powerful. ALL professional operators are well versed in dealing with it day in and day out. Although they have been through tense moments due to financial losses, they have learned the most important rule in trading the markets: losses are the COST OF DOING BUSINESS. They have a high emotional management procedure and are trained to implement it no matter how hard their "ego" may suffer.

 

This is easier said than done, as emotions kick in and all theory crash and burn together with any trading plan.

 

Here you have some easy steps to help you start taming your emotional horses.

 

— What you see is NOT what you get, as opposed to what you have been taught all your life. The way you act is just a consequence of years and years of education and interaction with others and not your genuine attitude. You are the product of an outside education, not necessarily positive.

 

— In the long run, your Forex business is just PART of your whole life, together with your family, friends, hobbies, long-term projects and various other activities. I personally use a very powerful "mantra" when in pain following a loss. LIVE TO FIGHT ANOTHER DAY!

 

— Never lose sight of the general picture. That is your primary goal. For a professional Forex operator, the primary goal is the PROTECTION of his or her trading capital. Keep a trading journal and learn from your mistakes.

 

— If you want to get a pretty accurate picture of your trading prospects, take a look at your daily emotional decisions. Most of the time, you will repeat all emotional behavior in your professional life.

 

If you take your time to sit back and observe your daily routines, the picture will emerge with greater clarity, helping you foresee hurdles along your trading career. Do you have a swinging mood? Do you change your mind very often? Are you capable of keeping a commitment? Do you lose your temper easily? Are you on the "half-full glass" or "half-empty glass" side of life?

 

These traits will not change just because you start trading. That is why you have to be very careful with your expectations. Base them both on your assets as well as liabilities, in order to obtain an accurate picture.

 

That is just the beginning, but a very resourceful one on a journey few of us have started yet.

 

I have seen traders taking NLP (Neuro-Linguistic Programming) lessons, practicing the Tai-Chi art or simply meditating. They try to get in touch with unseen forces at work deep inside, vectors of influence that rule our inner world.

 

The way to succeed in life has infinite variations but one common start, superbly crystallized in the following aphorism, inscribed in golden letters at the entrance to the Temple Of Apollo at Delphi and attributed to Socrates, among several other ancient Greek philosophers: NOSCE TE IPSUM,(Know yourself).

 

The magic of success is within our grasp. We just need to find the wand!

 

by Bogdan Vasile

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  • 3 years later...
  • 3 months later...

Absolutely right, there is really no question that our emotions plays huge part in deciding our future and if we want to succeed in any business then emotions has to be kept aside. Working with OctaFX broker really makes my potential to go full level as they have very small spread of just 0.2 pips and also the stop out margin is just 15% with margin level been 25%, so it is extra ordinary to have so many benefits under one broker!

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I don't know how did you all do something like this, for me forex is totally randomness we cannot predict it for 100% especially by using this kind of looking at your daily behaviour, also to be honest this kind of strategy may work for trader who trade daily and not for me who does not trade daily.

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I also really curious how someone can predict someone's potential by daily trading? How about if one people trade once in a week? Can you see how big is one trader's potential during that time? I don't think so, if you want to see someone potential see their long term trading records.

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True, according to me by reading their trading records we can see who good that trader when it comes to trade, at least we can invest later if we really need him/her. But by only using their daily trading behaviour does not help i really advise for seeing the long term records.

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@myregister: Short term records is fine too, but the credibility for using that as the object of analyzation when we want to precit someone's potential is lower compared to long term, some of my friend giving me advise to look at 70% of their long term records and 30% from their short term records by that we will get overall performance from that traders

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You make sense there but still potential element of trader is their willingness and i cannot see it from thier behaviour also can you tell me that i trade everyday or not? Of course i am not trade everyday even yesterday i traded and tomorrow i will trade but still i don't trade everyday because this monday i don't trade any single currency. So using behaviour is not a really good idea.

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  • 1 month later...

Still you can trade with behaviour, you can fix yours not to be so greedy and so on. The potential of making profit through this way is exist, people can make profit from fixing their own behaviour and of course behaviour affected someone's trading.

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It is hard not to worry in fact many traders lose their money and feel like they lose something important, some people even dishearthened and discourage theirselves to continue to trade. Anyway, by behaviour alone we cannot make such a prediction for someone's potential, that is too much early.

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  • 7 months later...

It is hard not to worry in fact many traders lose their money and feel like they lose something important, some people even dishearthened and discourage theirselves to continue to trade. Anyway, by behaviour alone we cannot make such a prediction for someone's potential, that is too much early.

You get the point there and i think i must reprogrammed the way i think about that. Since i saw it by myself a bad traders turn into good traders and now earn well it is one of my friend which i know also start 2 years eariler than me. Trade with bad trading behaviour, usually did one shot trading which worry me so much but then changed the way of him trade and turn into full-fledged trader with earning around $900-$1000 per month.

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  • 5 years later...

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