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Strong Buy Buy
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Sell Strong Sell
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Neutral
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Managing Emotions

Emotions can act as the biggest hurdles when it comes to trading Forex profitably and consistently.

Emotional thinking in matters of trading makes trading the same as gambling. There is little risk management and consequently little consistency.

Harmful emotions when trading

1. Anger and frustration: These can lead to revenge trading, which has never done anyone good. It leads to traders who have already lost money on a pair to keep trading it to try and make that money back. This rarely works.

2. Greed: Greed leads to staying in a trade too long and often causing profits to turn into loss in the hope that you can make bigger profits. There are times when it is better to leave winning trades run, but it is up to the trader’s understanding and analysis to decide when it’s ok to let a trade run and when they should get out with a smaller profit.

3. Hope: Hope doesn’t let people accept a loss. A lot of times traders lose a little but stay, even when the odds are against them, in the hope that the market will turn. This can cause bigger losses.

Therefore, it is important to know when to stop and get out of a trade and this can be done only when the trader is thinking rationally instead of emotionally.

A great way to manage emotions is to stick to a strict trading plan.

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