Are You A Greedy Trader? How To Contral A Greed In Trading

Are you a greedy trader? How to contral a greed in trading

If you want to be a successful trader, greed is probably the biggest obstacle you will have to overcome. If you try to get rich on every trade, you will more than likely end up blowing your account – slow and steady wins the race. It’s the great challenge that all traders face – if you want to get RICH QUICKLY, you have to do it SLOWLEY.

Greed is the emotions which plays important role in trading/investing. New traders and their accounts have suffered because of greed. In fact, this is how the saying “Bulls and Bears make money; “Pigs get slaughtered” the markets show no mercy to greedy traders and that ie very true.

Let’s face it, it is our desire as traders to acquire handsome returns that drives us to trade, but this desire becomes unhealthy – even dangerous – when it is EXCESSIVE!

Therefore, greed is often considered the most dangerous emotion for traders; even worse than FEAR. Fear can paralyze you and keep you from trading, but your capital is preserved for as long as you keep your hands in your pockets. On the other hand, greed PUSHES you to act, in ways and at times when you shouldn’t; that’s why it is dangerous. Greed can prompt you to act irrationally. For traders, this usually comes in the form of over-leveraging, over trading, chasing the markets, or holding on to trades you know you should have exited long ago.

When you think about it, greed is not that different from alcohol; it can make you act foolishly when you have too much of it in your system. When it comes to a point that greed clouds your trading judgement, you are particularly drunk with it.

Like many other worth efforts, overcoming greed requires a lot of effort and discipline. It isn’t easy, but it can be done. It’s all a matter of taming your EGO.

Managing and dealing with greed is not something that will be resolved over the next couple of trades over the next couple of days, it required practice and a lot of practice indeed. The following practice can help you in some level.

Have a trading plan:
To keep this detrimental emotion in check, having a definite trading plan in mind ideally written out will help. Keep the plan nearby where you can reference it prior to placing any trade. By having a clear trading plan that is written out, we know exactly what we are looking for in terms of an entry. Don’t compromise. Wait for the precise entry as laid out in the plan itself. Let the market come to you rather than you chase the market in greed of missing a trade.

Use the risk management strategy in every trade:
This is the area where greed can really kick in, traders are always very tempted to take high leverage and put larger amounts in hope to get high returns, they want huge profit with less size of their trading accounts which is very dangerous. You should have very strong risk management plans before putting any trade and make this as practice and you will see the difference

Don’t do over trade:
Overtrading is also result of greed, only trade as per your plan and if you are getting excitement from overtrading then you are not trading but simply gambling your hard earn money.

Greed is one of the biggest enemy of trading and practise with proper discipline and right mind set with self-control will help you to overcome this negative emotion. Always remember longevity in trading can only be achieved through discipline and patience.

Wish you good luck in your trading and investing!

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