A trader and an investor face lots of positive and negative emotions most of the time.
If you want to be a successful trader, greed is probably the biggest obstacle you will have to overcome. if you want to get successful in your trading and investment business, 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 is very true.
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.
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.
Greed can be seen as the opposite of discipline. Individuals that are disciplined very hardly fall into the greed trap as they have some sort of plan and stick to it. Trading plans and trading journals are a great way to keep traders on the right path and not be tempted to enter trades that deviate from the plan.
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 enemies of trading and practice 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.
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Editors’ Picks
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Gold is seen building on the previous day's strong rally of over 2% and continues scaling new all-time highs for the second consecutive day on Tuesday. The commodity climbs closer to the $4,500 psychological mark during the Asian session and remains well supported by a combination of factors.
EUR/USD eyes 1.1800 barrier near two-month highs
EUR/USD extends its gains for the second successive session, trading around 1.1780 during the Asian hours on Tuesday. On the daily chart, technical analysis indicates a persistent bullish bias, as the pair moves upward within the ascending channel pattern. Additionally, the 14-day Relative Strength Index at 68.89 sits near overbought, signaling strong demand. RSI remains elevated, which could cap gains if overbought conditions emerge.
GBP/USD knocks ten-week highs ahead of holiday slowdown
GBP/USD found room on the high side on Monday, kicking off a holiday-shortened trading week with a fresh spat of Greenback weakness, bolstering the Pound Sterling into its highest bids in ten weeks. Pound traders are largely brushing off the latest interest rate cut from the Bank of England as the UK’s central bank policy strategy leaves the water murky for rate-cut watchers.
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