There are two things that you need to control. Two things that in trading as well as in life will kill you. These two things will kill your forex account. Guaranteed.
Fear
More likely to affect seasoned traders. Newbies will be somewhat fearless like young kids thinking they are invincible. Too many action movies perhaps. Too many daredevil friends that got lucky and didn't hurt themselves. Yet.
Once you have traded for a while, especially if you had a great start, when that bad trade hits, it's like monsoon season. When it rains, it rains good. Your life will suddenly spin out of control and that confidence you had is in an instance gone. Just like when you are a fairly good boxer and suddenly you face an opponent that is always a couple steps ahead, you can't even get in a punch and you are left on the defensive time and time again.
Fear is a Bitch. Sure you gotta get back on that horse and get up every time you fall down. Chinese proverb: Fall down 7 times. Stand up 8. Easier said than done. If you're reading this and you say "whatever" "won't happen to me" then book mark this page for when that day comes. It will come. I guarantee it. It's like a bad action movie where the hero suddenly can't fight anymore. Like an NHL goalie suddenly not being able to stop pucks anymore.
At this point F.E.A.R. stands for Fuck Everything And Run. You are in a bad spot and before you fix it, you need to acknowledge it. You need to sit back. Stop your trading. Take a deep breath (more on a great breathing exercise later) and rewind to the good memories of trading. How you are good at what you do and you just have been beaten by the market, and rather than getting up only to get knocked down again, you are going to fight smarter, not harder, get up and figure out what's going on before you enter another trade. What you need to do is Face Everything And Rise.
Face your mistakes. Study, analyze, and don't you dare make another trade until you have truly faced and figured it out. Better drop your lot size, heck even go back to a demo account. And then Face your Fear and prove to yourself you still got it. Take your time. And if you have to then reach out to someone that can help you. Tiger Woods has a coach. Not one but several. He makes mistakes. He comes back. Who's right there behind him? His coach. His mentor. It pays to have someone in your corner.
Greed
Many traders are in it for the money. The good traders are in it for the lifestyle and freedom. Money isn't everything but it sure helps a lot. But it can also be the death of you. That greed of always wanting more is like a gambler with an addiction. He wins at slots and instead of walking away keeps playing only to lose it again and again. Itching for that next win.
Just like with fear, greed you can sense. You will feel yourself not being your usual calm self but instead you feel this need to make money, more money, always more.
For a lot of traders it's all about the money when they should be counting pips. And you have to be satisfied with the pips you make. Don't let emotions take over. Stick to your trading plan and Take Profit. Sure you made 50 pips and the market kept moving for another 30. That's half glass thinking. You made 50 pips. End of story. It's a good day. Who cares if the market kept moving for 200 pips. If your trading strategy didn't have a signal then it's not worth the risk. The reward is big, but so can be the risk. You don't need an emotional rollercoaster ride. So do yourself a favor and stick to your take profits and your trading plan. Your coach should be there slapping you on the fingers everytime you do something silly. Impulse trades are the worst.
Fear and Greed are the great demise for many people. In life. In Business. In Trading. Keep your emotions in check and be happy with what you have. There will always be someone smarter, taller, better looking, and funnier. There will always be someone making better trades. Who cares. All that matters is who you are and that you are happy with yourself and your trades. Happiness is making good trades consistently and making profit consistently. End of story.
