Page 172 - Ultimate Guide to Currency Trading

The Emotions of Trading

Earning money in the currency markets through trading (capital gains) can be a wonderful, thrilling
experience. You have outwitted the markets and outsmarted them, and have made a financial gain to

prove your smarts! When you feel the power that comes from winning in the markets for your-self,
you will know how professional traders feel when they make gains in the market.

There are a lot of emotions that are generated from trading in the FX markets: the ups, the
downs, the winning and the losing. Couple this with working early in the morning to set up a trade, or

getting up at 2 A.M. to see if your order has been filled—you can see that it takes a lot to keep going
at currency trading. Hopefully you will find that the winnings are enough to keep you in the game,

keep you interested, and keep you trading.
Losses happen, and your emotions can be low after a bad trade. This is precisely why you

should use some of the risk management techniques described in this book, and why you should build
up your account slowly. Even though you are using huge amounts of margin, you should never get

yourself in a situation in which you are getting a margin call. You should also have enough extra
margin to double down and dollar cost average into a trade that has worked against you. Another

thing you can do it to switch into a longer-term perspective, and wait for the trade to turn around.
It might be that the market is really suffering, and you can get into an AUD/USD trade at eight

cents cheaper than it was at the beginning of the month. If the interest differential is the same, why

not take advantage of a long-term carry trade while you wait for the markets to recover (even if this
takes several months or years)?
On the other hand, you should have your accounts set up in such a way that you can leave

your Forex trading for any reason. If the markets are not that good, and you do not feel like risking

your assets and margin on trading, take the money out of the account. Have the Forex broker send
you a check and use the money on something of value. These are the facts: if Forex trading is not
adding to your life and bringing you enough value for the time and money that it takes, then take a

break and use the money for a something that is of value.

You can set up your Forex-trading endeavors to be much like a business. In this way, you
can set yourself trading hours, lunch hours, and even days off. You are in control of how

ALERT your business operates. Keep in mind: Forex trading should work for you, not the other
way around.