I may have a different opinion, but i believe that most times it is not about ego or greed when risk management fails.
Most times during trading, the market moves away from the predicted movement and does something entirely, which SL cannot stop, and it doesn't matter if you run a risk management plan or not.
There are things you can control and things you can't control in the market.
Risk management is one thing you can control. The market has nothing against you if your risk management plan is good enough.
it may be true but most traders of course wanted good returns during their trading, so they always predict in favour of them. they act according to what they thought will happen but its the other way around. if a trader will just be conservative with his calculations, he will not lose a lot of money, if in case he will lose that particular trade. but of course, the reality is different.
when you are already in the market, you suddenly change your decisions for the hope that you will get more money. i think thats where most failed, changing their strategies when they are already in the trading market.
You should be consistent with your approach to the market.
Greed isn't that negative of an attitude. Although it is mostly negative at times (if it goes overboard), it can be actually helpful sometimes, so fully blaming Greed isn't entirely correct, but it isn't entirely wrong either. Risk management plans are in the end, just plans, and plans are bound to change IF and only IF someone actually understands how the market works.
There are times that you need to trade even though your plan says no all because of the fact that there's a chance and a high one at that. IMO, most mistakes that actually happen in trading is because the trader fails to understand the movements, well I mean, no one does most of the time but I'd say that he was just unlucky it didn't go as what he planned. IT is important though that he could minimize any losses that he got from changing plans though.
P.S. OP your BTC profile link in your linked post doesn't work. Just sayin.
In relation to Risk management, i think greed is the first factor.
Thanks! I corrected that. But it shouldn't be classified plagiarism since it is my content.
I agree with you OP. Greedy is the biggest problem that every trader face, and even the pro trader will have the same problem. But if we still stick on the target price that we want, we will have a chance to eliminate the greed because we know that when the price can jump in a short time, the price will not stay on that price for a long time or the price will not always increase higher than that price.
We need to see when we need to sell the coin, especially if the price can touch the target price want, and don't expect to see the price will always go up more than the target price we have. Yes, it is hard but we need to try more and more so we the greed is not posses us and prevent us to make a profit while we can.
Good point! we improve everyday as traders.
If we stick to a target price then we will need to hold for long term investment and eventually it will decrease our investment risk.
but most people do not understand this.
Not everyone wants to hold trades
The fact is most trader become greedy when they see the price jump, and I already experience that before in my beginning of trading. At that moment, I am missing the best moment to sell some coins at the very highest price, and I can make a big profit, but then I realize that the price cannot still increase, but that is too late. Although that is too late, I can make a profit, but that is not bigger than the last time of the highest price.
From that experience, I always try to remember to close the trade whenever I see the very highest price, so my profit can be at the top rate. That is one of the best lessons for me that I always keep in my mind.
greed causes FOMO!
This is why 90% of people should not be trading.
I honestly understand why laypeople compare day trading with gambling, because that's literally how most people treat it. They enter trades with no plan based on greed, they exit based on fear, they don't back test their strategies, they let losses run, they double down using leverage, etc.
It's no wonder Wall Street chews up retail traders and spits them out. Trading is very challenging psychologically and requires rigorous rule following.
Trading isn't meant for everyone.
That's one bitter truth!You are absolutely right OP, once a trader starts to be successful, they'll keep on pushing to make more and more money
Most of the pro trader has the mindset earn more and more profit after a successful run because no one else will be contented to a single success if trading is your source of income? This so called Greed factor that OP mention are for those traders doing leverage trading with high leverage which is obviously not in the traders official handbook.
The #1 common cause of traders loss of money is the patience to wait on the perfect opportunity to enter and exit in trading. I believe TIME is the best factor that affecting traders risk management considering that traders that we are talking about here are PRO traders and not those casual traders that don't have any idea on the fundamentals of trading.
This is not greed!
That's the reason why we also need to practice controlling our emotions and avoid those kind of mindsets. If you are greedy enough to recover your less, that will make you double it. It is not easy to perform self-discipline, yes, but you also need to work hard for you to achieve it. Attitude should not ruin your trading, always practice those things whenever you trade.
It is easily said than done.
The real hard thing is when they change the way they made more money to try and make even more money. You figured out a way, you are profiting, why are you changing this? I have seen too many people who did regular buy bitcoin, hold it, sell when its higher type of deal which is simple yet works most of the time, if you know when to get in and when to get out that is a perfect way to make a profit.
They then go into altcoins, they go into ICO, they go into leverage trading, all of a sudden they are on 10 different methods and they are losing like crazy. Anyone with a smart mind would know that if you are doing something and you are good at it, do not try to change too much of it and make it into something bigger and fail, just keep at it and you will be fine with what you know already.
Consistency is key!
I can confirm that this is the case.
I'm wayyyy too greedy...
Help yourself so your wallet remains Robust
One of the things traders have is that when they make a profit in a trade, their greed increases. They then take some trades, without proper analysis. The result is very bad, he loses even more than what he made profit. As a result of this loss, it’s effect psychologically. He then makes the wrong decision to recover the funds.The trader moves to high risk margin, leverage trading to recover funds in less time. But this turned out to be another biggest mistake, and eventually loses all his funds. In fact, greed is more prevalent among traders who have less patience. So the trader who can control his greed can be a professional trader.
Side effects of greed.
Greed would be on no. 1 spot. Next,?
Emotions yet this one would really be one of the most common enemy when you do trade because you cant easily fight when your emotions are already involved.
Yes, your experienced one but doesnt mean that you wont really be getting affected by this but somewhat due to knowledge into things you are already aware
on what would be your next move but it cant really be avoided that breaking out your own plan or goal or havent been followed just because you decide for another
route or path.
It depends though because some might really be a beneficial one but most of the time those immediate change of plans are caused of panic or being too worried.
Everyone still experiences emotion. Provided you're human, you can't escape it!
I agree mate. Because of emotion we tend to break our own trading strategies. I think if we trade like a robot (emotionless) using our proven backtested strategies and always stick to that rule. It will be profitable.
It is better if we join into the world of trading we must need to set a aside the emotions because sometimes it may cause too much fear and getting scared and pull out the position we have.
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the sooner you comply to certain terms in trading and see the market for what it is, the better trader you are.
