Emotion, the real reason of your failure in trading

[Ayers]

I have seen several trader's analyse charts extremely well, they will explain everything perfectly like market structure, talk about how the news is affecting the markets, CPI , NPF & and all that good stuff... they will explain candle stick patterns so well... but when they sit behind that screen and trading real money.. emotions always get the better of a person and this shows emotions are a big skill difficult to master!

But as trader's let's trade by following our rules for that mechanical approach &  emotions will be taken out of the equation!

of course, as trader, we need to find a way to take emotion out of the equation. but is it really that easy?

controlling your emotions isn't like other skill that you can simply learn, practice, and eventually master. if controlling your emotions were just a matter of effort and determination, we wouldn't see so many traders lose money, even those with years of experience.
it's one of those things that's much easier said than done.

[Out of mind]

In trading, one should never make decisions emotionally, as this leads to failure. Moreover, people's greed plays a big role in failing in trading, especially when someone expects high profits in trading, they are very greedy. They cannot control their emotions, they think that they will get a lot of profit in a short time, so they start trading with their emotions, but due to the bad situation in the market, many times the results are bad. Again, there are many people who lose once and want to trade again in anger to recover the lost money, but there they start without knowing any strategy and fail. It is necessary to make the right decisions in trading, but excessive confidence makes people face failure until the last moment. If you want to become a trader, you must follow a process every day so that you do not lose your money and control your emotions, but it is possible to take yourself from failure to success in trading.

[bangjoe]

I have seen several trader's analyse charts extremely well, they will explain everything perfectly like market structure, talk about how the news is affecting the markets, CPI , NPF & and all that good stuff... they will explain candle stick patterns so well... but when they sit behind that screen and trading real money.. emotions always get the better of a person and this shows emotions are a big skill difficult to master!

But as trader's let's trade by following our rules for that mechanical approach &  emotions will be taken out of the equation!

of course, as trader, we need to find a way to take emotion out of the equation. but is it really that easy?

controlling your emotions isn't like other skill that you can simply learn, practice, and eventually master. if controlling your emotions were just a matter of effort and determination, we wouldn't see so many traders lose money, even those with years of experience.
it's one of those things that's much easier said than done.

I admit that this is very easy to say, controlling emotions requires a lot of experience and long self-evaluation, until consciousness is able to use logic that is very dominant than feelings, which tend to be related to emotions.
I repeatedly disciplined myself but not yet at the stage where I was separated from emotion when trading, especially when I had two analytical conclusions to open a position, and I took conclusion A, but the market scenario that happened was conclusion B, it sometimes triggered my emotions, there was always irritation and regret that occurred because of the wrong in taking a position.

Being able to control that emotion means we are calm in trading, which is almost all difficult to do that when it comes to money.

[Faisal2202]

More than emotional control, traders should properly execute risk management and won't just rely into stop loss, but they should be trading only when they are seeing perfect timing to trade. Although stop loss can be helpful along the way, but trading with highly reliable skills and strategies will always create a bigger impact of success rather than just mere trading and resort into stop loss when a trader compromised his trade.

And trading for long term will always be preferable than day trading or short term trading, there is lesser risk and less pressure for the trader.

Even highly skilled traders use SL because they know the market moves very quickly, and during difficult times like a bear market, anything is possible. One bad piece of news related to the war, which is already involving other countries, could escalate further and involve them more directly, and the market could dump. Even day traders sitting in front of their screens might not notice it in time, but the market will react.

So always check whether you should use an SL with that token because not all tokens are suitable for it. Some are strong enough that we know even if a downtrend comes, they will recover.

Risk depends on the caliber of the trader. If a trader thinks they can manage the risk, then they can take it, because more risk can mean more profit but they should know what is on the other side as well.

[nelson4lov]

~Snipped

Sometimes we can make a profit on 10 consecutive trades, but all the profits from those 10 trades can sometimes be wiped out by a single loss. This is because, even when we realize we’re being carried away by our own emotions, it’s often very difficult to stop ourselves. Sometimes we’re unwilling to accept small losses, like 2 to 5%, so we refuse to cut our losses. And sometimes that decision leads to even bigger losses. When emotions take over in the market, we forget about technical analysis and the like; we’d rather hope the market moves the way we want it to. But we’re the ones who should be following the market trends, not hoping the market will follow our expectations. I’ve made this mistake several times myself.

The problem of winning 10 trades and losing all in 1 trade can be solved with a simple solution which is using stop loss at the levels we consider our entries to be invalid. We have to first accept that we won't win all of our trades and that positive expectancy is only true for a sample of trades like 100 or more. And anybody losing a their 10 wins in one trade simply have an issue with sizing. Someone with 1:2 RR s can lose 6 in 10 trades and still be very profitable.

[jossiel]

We can't expect to manage risk just by trading with money we don't care about losing, because how long can we keep doing that? Eventually, there will be a time when we can't afford to lose anymore, so it is not going to be a reliable option. We eventually have to learn proper risk management.

I have been in that situation that before losing is just fine and I've got some money spare to trading and have to keep on going. But eventually, realizing that it can't just be losing always because that I've got no unlimited spare to trade.

A SL does not make someone a good trader, but if someone is day trading, they should use it because they are trading on shorter timeframes and taking higher risks. They should always use an SL to cut their losses early.

It won't make you a good trader but that shows how disciplined you are and later on, when you are so good in minimizing your losses.

I think that's all set of where you're going as a trader.

[stadus]

Emotions cannot be totally ignored when trading. Of course, all traders are still somehow considering their emotions while trading, but they don't let their emotions decide their trade, still its mind over heart for smart and responsible traders.

Unlike if you're new to trading, you tend to be more emotional and be as greedy as you can be, simply because you still aren't completely aware the high risk that emotions can do with your trade. All traders have their own emotions, but not all traders are emotionally driven when they are trading, there's a big difference there.

Using stop-loss is just a method or approach in trading, it does help you to prevent from too emotional, but it still won't guarantee your future success in trading.

[Jatiluhung]

Sometimes we can make a profit on 10 consecutive trades, but all the profits from those 10 trades can sometimes be wiped out by a single loss. This is because, even when we realize we’re being carried away by our own emotions, it’s often very difficult to stop ourselves. Sometimes we’re unwilling to accept small losses, like 2 to 5%, so we refuse to cut our losses. And sometimes that decision leads to even bigger losses. When emotions take over in the market, we forget about technical analysis and the like; we’d rather hope the market moves the way we want it to. But we’re the ones who should be following the market trends, not hoping the market will follow our expectations. I’ve made this mistake several times myself.

The problem of winning 10 trades and losing all in 1 trade can be solved with a simple solution which is using stop loss at the levels we consider our entries to be invalid. We have to first accept that we won't win all of our trades and that positive expectancy is only true for a sample of trades like 100 or more. And anybody losing a their 10 wins in one trade simply have an issue with sizing. Someone with 1:2 RR s can lose 6 in 10 trades and still be very profitable.

Thats true. If a trader isn’t letting their emotions get the better of them, then the steps you mentioned will certainly be followed by that trader. Because if we’re able to control our emotions, we’ve already assessed from the start which risks we can take and which we can’t. And we’ve also certainly set a stop-loss from the beginning at a point where we’ve calculated the potential loss.

However, the problem is that when someone loses emotional control in the market, they sometimes even remove the stop-loss they set at the beginning. They sometimes even add more capital to their account to avoid a liquidation. But these actions only worsen their position in the market.

This is why emotional control or what’s commonly called emotional management is so important. After all, staying on track with your plan and strategy, and maintaining discipline in trading, ultimately requires strong emotional control.

[Cgrexp]

In trading, one should never make decisions emotionally, as this leads to failure. Moreover, people's greed plays a big role in failing in trading, especially when someone expects high profits in trading, they are very greedy. They cannot control their emotions, they think that they will get a lot of profit in a short time, so they start trading with their emotions, but due to the bad situation in the market, many times the results are bad. Again, there are many people who lose once and want to trade again in anger to recover the lost money, but there they start without knowing any strategy and fail. It is necessary to make the right decisions in trading, but excessive confidence makes people face failure until the last moment. If you want to become a trader, you must follow a process every day so that you do not lose your money and control your emotions, but it is possible to take yourself from failure to success in trading.

In trading, decisions have to be made by controlling emotions because decisions made by greed and emotions can lead to failure. However, even if emotions can be controlled, if there is no effective strategy, risk management and planning, there is a possibility of loss in the long run. Greed and unrealistic expectations often force investors to invest beyond their capabilities and they ignore the risk and trade excessively beyond the limit. When an investor loses a large amount of money in a trade, he tries to get that money back, which can also be dangerous because at this time the investor starts making decisions based on the desire to compensate for the loss rather than logic. When a trade goes against, more emphasis should be placed on limiting losses and protecting one's capital.

[Mr Reporter]

Emotions cannot be totally ignored when trading. Of course, all traders are still somehow considering their emotions while trading, but they don't let their emotions decide their trade, still its mind over heart for smart and responsible traders.

Exactly. Well, one major reason I bolded this statement of yours is, that Mindset over the Heart is what separates a gambler from a trader most of the time, the reality check about emotions in trading most of the time is when you see that green candlestick your heart starts to pump very high in fact it might even cause someone to have high blood pressure most of the time if care is not taken, and the red candle makes you some of the time have running stomach and it make you think if to cut the trade or not, and a borrowed money to trade makes you feel fear or get natural anxiety…

But the key takeaway is that the smart traders would still feel all of that too. But the difference is that they don’t let their emotions or mindset hit their  "Buy" or "Sell" button…