Avoid Lack of Judgment

Fear and greed are emotional interferences. Consequently, they can affect your judgment by making you make irrational decisions. You need to master your emotions to follow your money management plan. Do not let emotion control you.

You may hear here and there some forex news that may make you want to change your way to trade. Do your diligent research, be patient and trade without being influenced. With lots of practice in a demo account and a Nano or Micro account, you will see eventually consistent patterns of profit. Don’t rely on someone else's advice. You can learn to see the market as successful traders look at it by doing their homework.

Fear makes you miss profitable trades, take the wrong ones, and/or exit the trades too early, not giving a chance to your trade to make more pips. The only way to correct “bad” trades is repeated experiences of control and safety.

Greed can make you take trades that are too big, taking uncalculated risks such as engaging into a trade without evaluating the impact, ordering too many lots in the hope of success and/or wanting to make one more pip and then the market changes direction.  A trader that lets the winning trades run and cuts the losing ones can make more pips than any professional trader. Success is measured in years, not weeks or months. With time you will get confidence and that is the key.

 Avoid Emotional Investment

Trading foreign currencies can become an emotional investment. Emotional issues can  become very powerful when you trade with real money. The danger is to make irrational decision that you can later regret. The key is not letting your emotions control your decisions. When money is involved emotions can take over people's minds. Less emotional interference leads to better risk management. If your mind is filled with all kind of thought, how can there be room for you to concentrate on your trading?

Think Pips, Not Money

To avoid getting caught into fear and greed situations, you need to think in terms of pips, not in term of money value. This can be a training to fade the emotions on each trade. Greedy people are never satisfied with money. Don't let greed take over you. You don't want to be caught into the greed scheme, then doubt, fear, and regret can come.  To beat greediness you can set a daily target, stop trading and don't look back. Look how to make it happen and do not sabotage yourself. Take a % of your profits regularly and reward yourself. Feel the money, then you will attract it.

How to double your money?

A quick calculation that we suggest at www.ForexWins.com is the rule of 72.

When you know the Rate of Return

If your statistics show that you can earn 12% on your money daily, monthly or annually, you just divide the magic number 72 by that percentage, such as 12 in this example. So, it can take you 6 days, months or years to double your initial investment if you continue to make the 12% you are steady to make.

Danger to doubling your money in a certain number of days, months or years

A mathematician can add here. Oh yeah! I know how to achieve my goal in 10 days, months or years, for example, I would divide 72 by 10. The result 7.2% is the after-tax compound annual rate of return I would have to earn to meet my goal on time. We do not recommend this approach as the word “compound’ has its dangers as you will need to increase the number of lots at risk and not respecting your money management system. So, use the percentage method. It is safer.

What's considered enough money?

“Just a little bit more.”
                      Will Rogers

Ask Yourself…

• Do you have any fear in your life in general?
• Who is responsible for your fears? 
• How can you control fear?
• You need to accept that you are the only one that is responsible for it. Can you?
• Do you control yourself in stressful situations?
• In what state of mind do you tend to trade?
• Do you have any emotional interference in your life?
• Do you tend to be emotional?
• Are you an impulsive person?
• Can you relax?
• Do you tend to hesitate just before you order a trade?
• Do you tend to sabotage yourself?
• Do you set daily targets?
• How do you know the currencies' behaviors?
• Are you satisfied with money?
• Can you enjoy spending money?
• Can you stop trading when you meet you goal?
• Before you enter a trade, do you think about winning?
• Do you like your trades?
• What is your average holding length of a trade?
• Do you tend to regret opportunities that you missed?
• Do you think in term of pips or in term of money when you look at your results?
• Can you forget and forgive yourself?
• Do you reward yourself for your wins in your  life? 
• Your questions…………………..