Danny Dotson
There is a lot of fraud in the forex world, like most things that link to money – some are malicious and benign. Nevertheless, people might have seen several commercials or advertisements describing how exciting the world of high finance is and how rich they can become by trading currencies. But most of this is going to be nothing short of sales tactics.
The truth is, most professional traders are very keel people over the longer-term.And this is not to say that there won’t be occasional blow-up or outburst, because each time they talk about massive amounts of money, emotions usually get involved. This goes the same for eToro traders or any traders of online brokerage firms for that matter.
Traders are in a case where many big banks are trading algorithms, suggesting that there is no emotion in those moves. Compare that with the regular retail traders, and it will show how they are not sharply thinking at every time as they are trying to gain their money back following a specific bad loss as an example.
Winning and Losing Streaks
Winning and losing streaks can bring a lot of the same issues. For instance, if traders have seven of eight losses in a row, it feels like they can’t do anything right when it comes to trading. After that, traders will begin to make erratic and emotional decisions.
Meanwhile, if traders have five to six consecutive wins, they would feel like they have finally understood the market and start to trade more. They will feel like they view the market in ways only they could, and that is exhilarating.
However, the reality is that this is one of the most dangerous times because traders may find themselves taking trades that do not line up quite perfectly. But still, they are willing to take more risks than usual.
Generally, if traders had a streak of wins or losses, the reaction must be the same – sit on the sidelines and take a bit of a breather. They should get their emotions back into check before trying to go back into the market. And that would give the ability to calm down and make much more strategic decisions.
Act Like a Pro
The most important thing traders must remember when trading is professionalism. They need to have a system that has proven to be reliable over the longer-term. And once they know that it works, they must not work against it.
Sadly, too many retail traders are letting the spur of the moment get them. Therefore, they take traders that have nothing to do with their system. And this is hard to compete against because there are instances where they feel like they see that the market is about to do something before it happens. But if it not a part of traders’ normal trading signals, and they are wrong, it could entirely blow the results up. In that case, traders will find erratic returns.
Also, remember that there is a reason why professional shops have risk managers and too tight rules. They know human nature and understand that the more exciting trading becomes, the more likely something bad is about to occur. And this could be as simple as giving back all of the profits for the day or like turning a 1% loss into a 10% loss. Either way, it is deflating, saying the least.
