Master the Concept of Greed-Free Trading

Master the Concept of Greed-Free Trading explained by professional Forex trading experts the “Master the Concept of Greed-Free Trading” FX trading team.

Master the Concept of Greed-Free Trading

“How can I control greed??? That has been my number 1 problem.”

The above two quotes came from emails sent to me from two different traders. I am sure many of us can identify with these sentiments. In the early days of my trading I know I could certainly identify with them! Human nature being what it is, feelings of this type have been felt by virtually all traders at some time or another.

Indeed, the desire to make more and then even more yet is very compelling.

Greed can influence us to enter trades that we never should have entered in the first place. It can make us stay in losing trades too long as well as make us stay in winning trades too long. Greed also plays a big part when we take on too large of a position on a trade in the hopes of reaping huge profits. All in all, it has a truly negative influence on traders.

Here are some ideas that, if put into play, I believe you will find yourself better able to cope with greed.

Have a Trading Plan

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 chasing the market in fear of missing a trade.

The trading plan will also denote the size of the trade you will make along with how you will determine the placement of stops and limits.

By knowing all of these aspects of the trade ahead of time, and sticking to them, you will be less likely to make decisions (oftentimes governed by greed) on the fly. Since we let the trade come to us initially, we start out on our terms. By knowing the size of the trade that we will make (money management) and how much we will risk (stop) and where we will exit the trade (limit), we will go into the trade with a greater level of confidence.

Think of this plan as a blueprint for your trade. Just as a builder would never even consider building a house without a blueprint, as a trader we do not want to enter a trade without our “blueprint” in hand.

Employ the Principles of Money Management on Every Trade

When it comes to Money Management, or the lack thereof, this is an area where greed can really kick in. Traders are very often tempted to put larger amounts of their trading account at risk in the hope of reaping greater gains. They try to do too much (attain outsized profits) with too little (the size of their trading account). This is particularly true when they see a trade that to them looks like a “sure thing”.

Master the Concept of Greed-Free Trading Conclusion

For more information about currency trading brokers visit Forex brokers comparison website, Tip foreign exchange trading
experts please by share this article about Master the Concept of Greed-Free Trading

In this article