Can emotions be left out of trading?
Everyone who trades and has read books or watched trading videos with gurus and very successful traders has heard that when you are trading, you must leave your emotions out and trade without them. Just follow the plan without thinking or letting emotions like fear or greed take over and destroy the trade and eventually your portfolio. Of course, as we can all understand, leaving emotion out is almost impossible because we are humans, and humans are creatures with all kinds of emotions. We react to those emotions, and those emotions shape the kind of people we are. These emotions are probably what made us start trading in the first place. If there is one person who can say that they have no emotions when trading, they are either lying or they are a sociopath.
source
How should we use our emotions?
Of course, we cannot trade based on emotions. We have to follow the plan we have from the beginning because only with that approach can we minimize the risk we are taking and maximize the profit. But we have to use the emotions we have after each trade. We have to log them, write them down, and explore them because if we can understand and explore those emotions, we will do better next time. When we enter a trade, we do so based on emotions. Maybe it is greed, maybe it is euphoria when we see the market go up, and we find a nice setup. We follow it because of the hype, and when it goes wrong, we understand the feeling that made us enter it and then explore what we missed on the chart. Because at the end of the day, charts are the feelings of the market. If we want to understand what the market is feeling, what the emotions are, we look at the chart. And when everybody looks at the chart, then it becomes something like a self-fulfilling prophecy that will become true.
So, guys, when you hear people saying "trade without emotions," don't take them seriously because they are repeating something they heard or read from someone else, and I am 100% sure they cannot do what they are telling you to do.
Posted Using InLeo Alpha
