EMOTIONAL INTELLIGENCE IS A SKILL THAT CAN BE MASTERED
For successful trading on the market from the trader, first of all, you want inner balance and self-control.
Of course, the technical aspects of trading strategy is very important, however, factor in determining long-term success, is the ability to manage their emotions.
The lack of clarity of the mind of those traders who have just started their way in the profession, leading to loss of money. When failure follows failure, often people abandon his dream. The reverse situation also occurs.A lot of examples of how novice traders who from the beginning approached the process of trading calm and measured, has received remarkable results.
In many ways, the difference in approach was determined by the degree of development in humans is such a wonderful feature as emotional intelligence. Many traders doubt the ability to regulate their own thinking, but the good news is that emotional intelligence is a skill that can be mastered. This requires only a desire and practice.
CLEAR THINKING DETERMINES THE RESULTS
Like all more or less worthwhile in life, trading – post is not easy. Those who at least once thought about trading as a career must accept that emotions in the trading process will be unpredictable (but exciting) roller coaster ride. Therefore, the ability to think clearly is vital.
To prevent violation of the rules of your trading strategy, the trader shall provide correlation of trading methods market, character of the trader and his risk appetite.
For example, if immediately after opening the transaction, the market starts moving against the trader, it can cause a strong negative emotional reaction based on a false, distorted judgment, and lead to unreasonable, impulsive closing of the position. Positive emotions that appear after a series of successful trades can also be dangerous to traders, such as overconfidence. I've seen traders catch the feeling that they "understand the market". It distorts reality and leads to excessively risky actions. As a rule, all ends is not very good – at best sobering series of losses. The market is able to very quickly "put in place" person.
How the trader to correctly build the process of managing emotions? The answer is to first become aware and then consciously change your settings and habits. Unfortunately, no magic exists. Only a methodical and challenging work can lead to success.
Below are the most common difficulties beginners faced in the first year of trading.
1. THE LOSS OF A SENSE OF THE OVERALL PICTURE
Perspective and balance are two concepts I would recommend clear to all new traders before you open a trade. Past experience has a strong influence on how we react to the present, and that all traders face from time to time. Professionals who have long traded on the market, treat this phenomenon as a "shift in the direction of novelty". In this case, refers to a condition in which distorted the overall picture of what is happening because of recent trading results.
Consider a trader who has lost a certain amount of points in the last two transactions. Before that, he sold eight of profitable orders using the same trading strategy. An objective attitude of the trader to the results of his work he could conclude that his strategy has a high winning percentage. However, it often happens that beginners feel a sense of insecurity and doubts about the sales approach and the effectiveness of the chosen tactics because of the recent findings. If the trader is overreacting to the situation, then he may, without the need to start to change the strategy, which in turn can lead to poor trading results.
Always remember one simple truth: recent history does not determine the future. The truth is that all professionals experience moments when a series of failed transactions become the center of our attention. However, this situation traders are pretty easy to fix. Consider and evaluate the effectiveness of your trading on the batch principle, that is, the amount of profits and losses over a period of time, not individual transactions. Conducted analysis thus provides the ability to maintain psychological balance and clearer to see the overall picture.
2. CLASH WITH THE ANXIETY IN THE HERE AND NOW
I think that you need to adhere to a reliable strategy for a considerable period of time. Thus, you will have the fullest opportunity to master the principles of this strategy to achieve optimal results. Problems can arise when the trader has a status of anxiety during trading.
Effective trading strategies and systems have clear steps and rules that you must follow to trade with a consistently positive result. Despite the fact that most traders are well aware, that rule becomes rather hard when the trade does not work, and when given time everything that happens on the market absolutely does not correspond to what is seen and planned at the time of opening the transaction. Anxiety and internal psychological tension in such moments are perfectly normal and natural emotional reaction. However, this should not lead to premature failure of the applied trading strategy.
To prevent violation of the rules of your trading strategy, the trader shall provide correlation of trading methods market, character of the trader and his risk appetite. I call it "choosing the path of least resistance." To do what is right for you. From the intelligent combination of all these options comes the credibility of the trading system and the confidence in the correctness of the actions of the trader.
Simply put, a trading strategy needs to be tried and many times tested on the historical period and on a demo account. People need to make sure that it has the ability to stick to your trading plan even in test situations. Failure to do so will lead to needless losses. Of course, when you move to real trading is always have difficulty. But very often they are associated with unusually for the novice trader psychological pressure. And here comes the incorrect application of earlier, seemingly so familiar and so well researched trading techniques.
THE BEST WAY TO AVOID THIS IS TO HAVE SELF-AWARENESS
Understanding our own established habits, attitudes, many of which are outside of our consciousness, and related emotions requires patience and practice, but it is achievable. Traders have to watch those habits that affect the quality and results of their work. Only with a clear understanding of what you are doing – the process of trading can lead to consistently positive results. It would seem that everything is so simple, just need to understand what and why you are doing, but with this very often, great difficulties arise. This is the clear thinking, to achieve which helps the development of their emotional intelligence.
Most importantly, just keep practicing the work. One thing is for sure, this is the path that will lead you to consistent improvement in trading results.