When you trade, you need to make decisions free of emotion.
You can and will have emotions when you trade. The trick is to divorce yourself from them when you need to, or are considering acting.
This is why you should make your decision-making process as systematic as possible. You don’t need to automate it like a robot. Rather, you should know when to make a decision and what to do when decision time comes.
If it’s not a systematic, pre-planned approach, you are trading based on fear. Fear of a winner turning into a loser, of missing out on a trade, or of taking a loss.
So, every time you are about to act, take a moment, breathe deep, and recognise whether you are following your prepared course of action. If not, then stay calm and wait patiently for your trade to eventuate.
If you keep seeing times to act, but your plan does not allow you to, don’t panic. That is a sign you need to work hard on improving your plan.
About the Author
Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (get free access). He is the owner of www.fxrenew.com a provider of Forex signals from ex-bank and hedge fund traders (get a free trial). If you like Sam’s writing you can subscribe to his newsletter.