Avoid Greed In Your Trading At All Cost

Greed is enemy #1.

You will notice that GREED is topic that many Forex Traders tend to shy away from. However, that is what I am going to talk about today in this article. I discuss in more detail the subject of greed in the HBforex Power Trader Ebook.

These are some of the common quotes from traders…

”Greed has wiped out my whole account”.

“I wish I could control greed!”

“I think greed is my biggest problem.”

It’s not surprising to hear these kinds of quotes because it greed is apart of human nature.

The oldest emotion known to man is greed. Greed can make one a prince with millions or a pauper with only pennies. With that being the case, controling this emotion is of the utmost importance when trading the FX markets.

How can a FX trader trade and control GREED?

If you can identify with the quotes above then that means you are aware that greed is a problem when trading and that is a BIG first step to resolving the issue.

To keep this dangerous emotion at bay, you need to have a trading plan in mind, or even better written out. You should have that trading plan handy so that you can refer to it before making a trade. You will want to use a trading plan that you have test over time, one that has put pips in your account, live or demo. Having positive pips on every trade would not be realistic. However the trading system or plan you are using, has net you a growing account adding pips.

You should only make trades that are in harmony with your trading plan or system EXACTLY. If you are considering taking a trade that doesn’t fit the trade plan, don’t. The higher the probability of positive trade based on your trading plan, the more you should consider making that trade. This will prevent the tendency to just jump in a trade because “it looks some what OK”, or that ” I just like to be in something” syndrome.

Next, only put 5% of your account balance at risk at any one time, and trade with at least a 1:2 Risk Reward Ratio. There are two benifits from holding to both these rules, it prevents a trader from over leveraging there account also the trader is exiting the trade at a desired and pre-determined level of profit. If you are a greedy trader then it will show because you will over leverage your accout that’s the number one fault of greedy traders.

Lastly, once the trade is executed with stops and limits attached, don’t bother it! You want to let the trade run it’s course in accord with the original criteria you setup before emotions were involved.

Think about it… Greed Is Not Good!