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
EUR/USD rebounds after falling toward 1.1700
EUR/USD gains traction and trades above 1.1730 in the American session, looking to end the week virtually unchanged. The bullish opening in Wall Street makes it difficult for the US Dollar to preserve its recovery momentum and helps the pair rebound heading into the weekend.
GBP/USD steadies below 1.3400 as traders assess BoE policy outlook
Following Thursday's volatile session, GBP/USD moves sideways below 1.3400 on Friday. Investors reassess the Bank of England's policy oıtlook after the MPC decided to cut the interest rate by 25 bps by a slim margin. Meanwhile, the improving risk mood helps the pair hold its ground.
USD/JPY rallies to near 157.00 as Yen plunges after BoJ’s policy outcome
The USD/JPY is up 0.85% to near 156.90 during the European trading session. The pair surges as the Japanese Yen underperforms across the board, following the Bank of Japan monetary policy announcement. In the policy meeting, the BoJ raised interest rates by 25 bps to 0.75%, as expected, the highest level seen in three decades.
Editors’ Picks
EUR/USD rebounds after falling toward 1.1700
EUR/USD gains traction and trades above 1.1730 in the American session, looking to end the week virtually unchanged. The bullish opening in Wall Street makes it difficult for the US Dollar to preserve its recovery momentum and helps the pair rebound heading into the weekend.
USD/JPY rallies to near 157.00 as Yen plunges after BoJ’s policy outcome
The USD/JPY is up 0.85% to near 156.90 during the European trading session. The pair surges as the Japanese Yen underperforms across the board, following the Bank of Japan monetary policy announcement. In the policy meeting, the BoJ raised interest rates by 25 bps to 0.75%, as expected, the highest level seen in three decades.
Gold stays below $4,350, looks to post small weekly gains
Gold struggles to gather recovery momentum and stays below $4,350 in the second half of the day on Friday, as the benchmark 10-year US Treasury bond yield edges higher. Nevertheless, the precious metal remains on track to end the week with modest gains as markets gear up for the holiday season.
Crypto Today: Bitcoin, Ethereum, XRP rebound amid bearish market conditions
Bitcoin (BTC) is edging higher, trading above $88,000 at the time of writing on Monday. Altcoins, including Ethereum (ETH) and Ripple (XRP), are following in BTC’s footsteps, experiencing relief rebounds following a volatile week.
How much can one month of soft inflation change the Fed’s mind?
One month of softer inflation data is rarely enough to shift Federal Reserve policy on its own, but in a market highly sensitive to every data point, even a single reading can reshape expectations. November’s inflation report offered a welcome sign of cooling price pressures.
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