Successful Forex Traders Have Emotions but Use Discipline

By Richard U. Olson

If you are involved in the investment world, you probably know that there are two things that make most people do whatever it is that they do, whatever moves they make, in the investment market. Those two things are fear and greed - two of the strongest and most basic of all human emotions. Sometimes, fear can turn into panic. Sometimes, greed can turn into extreme, foolish risk taking. Successful Forex traders are not governed by these strong emotions, however.

Managed Forex trading is utilized by profitable Forex traders, such as those methods based on mathematical algorithms as well as other resourceful Forex trading strategies. The automated Forex trading system and trading software are very useful. They may also use a Forex expert advisor for guidance in buying, selling, stop-loss decisions and setting their trading parameters.

But whatever may be the case, Forex traders who are making money are not merely acting - or reacting - on emotions. This does not mean that they are unfeeling. These traders still don't like taking losses and they do desire to make more and more money (hence, that makes them "greedy"). However, whatever they feel about a momentary loss or a stroke of greater profits than they had anticipated is subsumed by them. In other words, if their feelings would cause them to do something that is not in their investment trading plan, they ignore their feelings.

No matter what sort of dire financial news comes out that day, no matter what sort of day you've had, you should not let these factors make your investment decisions for you. Stay to a carefully thought out Forex trading strategy and try to discount your emotional response to market movements.

Discipline is essential to the success of your Forex trading. You will drown if you let your feelings guide you. This may cause you to become one of the sheeple, if your fear causes you to stop-loss or take profits before you should. This can cause you to lose out on increased profit opportunities. Greed causes unreasonable stimulation of risking too much in heavy losses when instead you could have experienced great profits.

So a Forex trading discipline has to be based upon tried and true trading principles and strategies that have been proven to work. It has to be based upon real history.

A successful trader actually makes a lot of their money at the expense of those who make their decisions on an emotional basis. The movements in the market which can cause many to panic or become overconfident can bring large profits to the savvy Forex trader.

Sticking to your investment strategy in the Forex market is perhaps most easily accomplished by using automated Forex trading software. This software will use mathematical modeling to predict market movements based on past behavior and can keep you focus on your investment goals without the risks posed by emotionally based investing. - 23222

About the Author:

Richard U. Olson recommends the state of the art Fully Automated Trading System that he uses to make consistent profits in the Forex markets. Grab his FREE e-course on How To Succeed In Forex Trading to achieve your financial freedom.