In the last chapter, we studied why it is important to learn the Psychology behind forex trading. In this chapter, we are going to learn about the first demon of trading that engulf many traders. So, let’s start…..
The First Demon: Greed
Ah! This is the demon that is moving the forex markets up and down. This demon constantly keeps on whispering in our ear that you have to act fast to get maximum profits as the opportunities are slipping from your hands. This is a fire demon whose feet are always on fire stressing the trader to act fast and as quickly as possible causing him lose focus. This demon is hungry as traders who act fast because of greed end with nothing in hands.
Of course, people do forex trading as they want to make lots and lots of money and their primary focus in financial success. Also, it is important to know that the traders should have a strong feeling from inside to make money and to handle the stress of forex trading. However, this feeling or you can call it a voice from inside is good for financial success, but these voices and feelings become unhealthy when greed takes over. The trading strategies should be formulated by login and not by greed. A trader’s greed should know his place.
However, it is easy said than done; greed demon is perhaps easy to control for those who meditate at least half an hr a day. But there are other ways to avoid the wrong choices forced on us by greed. The most important step to avoid sticking to a disciplined approach and formulate a trading strategy. Do not try to deviate from this strategy throughout the course of a trade. If we study the fundamental and technical approaches to the market and make our decision based on that, the greed demon will bow silently in front of us.
A disciplined approach and refined trading strategy is the only way to success. Emotions run high when fear and uncertainty are in the air. To avoid such situations, it is important to develop a set of principles and rules so that one is not carried away by these emotions and the response to these emotions is an apt one. Aspiring for great profits and by being a prey to greed demon does not mean that one will actually end up enjoying those profits. It is just an illusion.