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…

[Decimetre]

~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.

This is serious problem among traders and it it not that they take corrections after every loss. When a trader gets carried away by his winnings, he sometimes forgets when to stop. He wants to maximise his good day when he believes that trades are favouring him without reading and accepting his little losses. Some of these people go on to introduce more funds even more that he has achieved in the ten successful trades. When this happens and they get trapped, they regret and loss their earnings. The idea of the riskier the trial, the more chances you will have to make more profit is also one of the reasons why they add more funds as they win.

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…

I will refer this description more like anxiety control and need to control one's reaction to every market conditions. Most mistakes are due to an expected change and not due to any actual change in market conditions. A person may assume there could be a pump and then go into borrowing further to trade while expecting a huge return or in some other cases, a person may be expecting a dump and sell at loss while trying to minimise the possible loss he is predicting could follow afterwards. This sums it up, knowing when to hit the buy or sell button in an uncompulsed approach would save you from a lot of losses.

[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.

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.

emotions are part of being human, so there's no way to completely get rid of them.  we can only learn to control them. but in reality, controlling emotions is almost impossible, and the truth is that not many people can actually do it. even psychologists, who understand human emotions very well may not always be able to control their own emotion, let alone the rest of us.

especially when money is involved, it becomes much harder because nobody want to lose money.

controlling emotions in trading is much harder than simply understanding them. that's why I believe less than 1% of trader can actually make consistent profit.

[Qhunman]

After you have seen yourself as a very good trader, that has graduated from the newbie trading, you set trading plan, you achieved it and used it to be making money, but later overconfidence become the start of greediness, you increase leverage and later it started with small losses from stop loss before it will later be followed by not using stop loss that you think is helping you and you lose all the money on your trading account.

All these things are interconnected, work on your emotions by trading with the amount of money that you can afford to lose. You can average but do not go for martingale and trade just good coins like bitcoin.

Stop loss is not what make you to be a good trader, it is about how you are able to manage your emotions by not disobeying your own trading rules/plans/strategies.

Most traders are saying use stop loss, do this, do that but emotions from a single or two bad positions set the bad emotions that easily caused trading assets liquidated.

Trading is all about patience.

In trading, there is not a guarantee that someone will be successful in all their trades which is why it is a bad idea to trade with greediness because it can cost you alot if your trade doesn't work successfully. Newbies traders are mostly the ones who trade with money they can't afford to lose. This is the more reason a newbie or someone who is just starting trading need to learn and acquire deep knowledge of trade because if they don't have a deep knowledge, there's a high probability that they lose alot of money in trade.

Furthermore, having deep knowledge doesn't guarantee steady profits as there are trades that won't go as planned. So whether you use stop loss or any trading tools you will still lose money in trade.And Since there's no guaranteed in profits if you trade, traders should only trade with their discretionary income as it will help them to trade without emotion because they have nothing to lose.

[Z_MBFM]

Too much emotion is bad for everything. Emotion is the only reason for big losses even for those who gamble. And in the case of trading, emotion also damages a trader a lot and forces him to fail. When you make a profit, you will feel that you are able to do a very good analysis due to which you were able to trade the right coin at the right price. At that time, you will try to take some more trades. And in case of loss, emotion works more, then do not hesitate to take more than one trade to recover that loss. The main thing is that when it comes to money, emotions play a big role because everyone only wants to get rich by increasing their money, no one wants to lose money.

[Faisal2202]

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.

I have also been in this spot, but I did not need to pass through it to learn this lesson because I already overthink everything even before starting, so I was thinking how much I could lose, and how much risk I should take. I lost in futures trading when I first started, then later moved into spot for a reason, and still we should have a limit on losing in a month, otherwise we can have financial problems. It does not matter what kind of trading we are doing, never revenge trade if we have hit that limit already. Also, do the same with the profit.

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.

SL is a good choice brother, but it is subjective imo, because I never used it. But for a month I said let's give it a try, and I lost more than I was losing before because I was booking my loss in spot trading. If I had not booked the loss with SL, I would have made some profit, so I changed the SL to a 2nd or third entry, so my average will be lower and I would get out of this trade easily without losing much, and if possible, then I could make more profit as well.

[Botnake]

With how you state your narrative about crypto traders, its clear enough that emotions should not be allowed to drive one's trader because it will only develop greed. And when greed appears, leveraging seems too easy not because you are confident enough that you'll profit, but most probably when you're greedy, you seem too focused on the profits that you can gain if ever, ignoring the high possibility that losing in trading is very much inevitable as well.

Traders can be emotional, I think that's part of us that we can't get rid of especially when were at a losing or winning streak. But having these emotions do not contribute longer satisfaction, when emotions messed up, our trading outcome will also be a huge mess.

[programmer3666]

After you have seen yourself as a very good trader, that has graduated from the newbie trading, you set trading plan, you achieved it and used it to be making money, but later overconfidence become the start of greediness, you increase leverage and later it started with small losses from stop loss before it will later be followed by not using stop loss that you think is helping you and you lose all the money on your trading account.

All these things are interconnected, work on your emotions by trading with the amount of money that you can afford to lose. You can average but do not go for martingale and trade just good coins like bitcoin.

Stop loss is not what make you to be a good trader, it is about how you are able to manage your emotions by not disobeying your own trading rules/plans/strategies.

Most traders are saying use stop loss, do this, do that but emotions from a single or two bad positions set the bad emotions that easily caused trading assets liquidated.

Trading is all about patience.

I even stopped trading futures a while back because I accepted the fact that I am very incapable of controlling my emotions once I place a trade. So I just focus on spot trading now. At least I won't bother about overly being confident that a trade will hit my TP and then something happens in the global market that turns an anticipated TP into a surprise liquidation. Emotional control is the bedrock of trading psychology. No matter how good you are!!! one way or another, you will give in to it. The market has a way of humbling you when your ego get too comfortable. Which is why roam around spot trading, I can just buy and wait. No stress about liquidation, no checking my phone every few minutes. If the market dips, I can hold and wait for it to recover as long as I bought at a very good price. That peace of mind is worth more than any potential profit from futures trading.