Greed and Revenge

Greed

Most traders in the forex market try to make a zillion dollars on every trade.

They're greedy. This leads them to stay in a good trade, hoping to get

more money out of it. This can lead to disaster -- the trade can move against

them and they get creamed. This happens all the time, and it still happens to

me from time to time. It's the single greatest threat in trading. But you can

already understand why that's probably true. But how do you overcome greed

when trading?

Revenge

This is the other big one. A lot of traders get creamed in the market and

then want to strike back. So they double their last order and go for broke.

This is natural, and I still deal with this emotion every day. The problem

is, how does one combat this?

Do not underestimate this emotion. It will drive you to ruin if you let it.

The market is not your friend. The market is so much more powerful than

you are. You cannot get “back at” the market. Trading when angry or

vengeful will be a total disaster. If you get rocked on the market, then back

up, take a deep breath, and talk to a mentor. Re-read the charts. Take a

break. Even if you think you see the best opportunity in the world after you

get blasted – just take a break. There will be trades tomorrow.