What do you think that rules the CFD market? It is something that professional Australian traders could control but the entry level traders couldn't. Basically, this is something that entry level traders cannot put up with. Of course, it is emotional trading. If experts have achieved success in trading it is mainly because they have the total control of their emotion. But entry level traders have no experience or skills to control their own emotion. It is not something to be blamed because we are human. There can be times when even the professional traders face difficulties due to this one thing in the market. So it is not something that entry level traders avoid all at once. It may take some time, learning and practice as well. For example, you may encounter a good trade set up so your emotions force you to enter into it right away, but it is not a wise move. Even though it is a good trade set up you should plan before you do something. When something like this happens the traders are forced to make worst decisions. So this is not something that entry level traders can overcome that easily. But still, it is not impossible if you try harder. What can a naïve trader do to avoid emotional imbalance?
You need to understand the risk factors of the market or else it will be really hard to survive in the Forex market. Those who are relatively new to the Forex market are always losing money since they don’t know how to manage their losing trades. Majority of the traders are more concern about their profit factors. Unlike the novice traders, the experienced traders are always trying hard to save their investment. If you can stay in this game you will definitely make money. So surviving is the biggest challenge for the traders. Learn to trade the market with managed risk and focus on the long-term trend. Ask yourself whether you are emotionally ready to deal with your losing trades. If not demo trade the market for few months.
Follow some good habits
It is not easy to overcome emotional imbalance but you must. In order to do it, you have to follow some good habits. This is one of the simplest yet practical option a trader should follow. Basically, confidence and discipline are essential habits a CFD trader should practice to become an expert in trading CFD. So to let go of emotions you should be confident in whatever the decisions you make, even if the decision s go wrong at times you shouldn't let the emotions to rise up. If you are really confident in your plans, strategies, and techniques you don't have to worry about emotions. Next is trading discipline, this is also one of the good habits that a trader must follow. If you are a disciplined trader you wouldn't have to worry about trading emotions. A disciplined trader can never be controlled by the emotions. So being an entry level trader can be a real pain but if you practice discipline and confidence it wouldn't be a big deal.
Success is directly linked to emotions
If you don't plan your journey beforehand you would have to deal with emotions. There is a strong link between your emotions and success. If you are impulsive about trading you wouldn't be able to look at trading success as it will be a blurred vision for you. This is why trading emotions are to be handled carefully.
Over-complicating the journey
If you over-complicate your journey you may have to deal with a lot of problems. In fact, you would have to deal with fear and anxiety. You should bear in mind that none of the complicated strategies will help you to make money. Rather it will cause you to handle emotion which can be pretty hard as a starter.