Today, trading is becoming more and more popular, especially with the increased interest of young people in fast-paced financial markets. Because of that, many companies and brokers offer a possibility to trade CFDs (Contracts for Difference), which are traded on Margin by retail investors. It allows one to go short or long easily and quickly with leverage up to 50:1.
The most essential part of the successful trading process is about having the edge over the market and how you manage yourself, your emotions, and what kind of trades you take.
Here Some Ways for You to Deal with Your Emotions
Take It Easy
Before opening a position, take some time to calm down. No matter how excited you are, please don’t take any trades until your emotions settle down and you think it’s the right moment.
Use Stop Losses
Always put Stop Loss when entering into a trade. If something goes against you, close your positions with minimal loss.
Seek Professional Help for Dealing with Emotions
Somebody who is part of your family or even just a friend can help you deal with emotions because he doesn’t care about money but only about you. He has no reason to give bad or good advice, so his opinion is always neutral and sometimes very useful in an emotional situation.
Invest in Yourself
Courses, Education, Seminars are the best way to keep yourself up-to-date. So you can be confident about your knowledge and abilities, which will protect you against common mistakes.
Do Not Chase Pips
Once entered into trade, don’t try to chase pips because they run fast. You stand a high chance of losing more money trying to catch them. It is better to stay in the same position until the expiry of the contract.
Take It Easy at The Weekend
Don’t take trades on Saturday and Sunday; it’s better to disconnect from trading for some time to reduce your emotional activity. Think about something else or spend these days with family or friends.
Analyse Your Trading Time Frames Individually
Each time frame has its situation. For example, during the European afternoon session, EMA20 (20-period moving average) would be flat or choppy on 4H charts but down trending on 1H charts.
Learn How to Take Losses
Trading is not easy. Successful traders take losses quickly without hesitation and plan how much money they can afford to lose. It reduces stress and keeps them confident in their abilities so that they can trade successfully.
Perform Weekly Reviews
Performing weekly reviews is vital for keeping yourself up-to-date and setting your trading goals. If you trade without a plan, it’s likely that you will not be able to succeed.
Keep A Trading Journal
A trading journal is the most effective way of self-monitoring and taking corrective actions when required. Journal helps track all trades and monitor results so traders can adjust their behaviour and improve their performance in future.
Take Breaks
When you’re under pressure, take a break and walk away from the screen. When taking a break, try to do something relaxing. Watch Tv or read a book.
Trade with Your Mind and not Emotions
Most of your negative feelings like fear and greed are due to old programming, which comes from your subconscious mind. The secret of how successful traders feel is that they trade with their minds instead of emotions.
Analyse Charts with Different Time Frames
Trading has many dimensions beyond just price action – such as the time frame on which you decide to trade. Some traders swear by trading on specific time frames such as 30 minutes.
What Are The Risks of Trading CFDs
The risks of CFD trading are high because, in most cases, you don’t own the asset that you bought or sold. When buying, you’re not interested in collecting dividends, voting rights, or other economic benefits from the underlying instrument. What matters for you is only the value of the price movements and not anything else. Consequently, it’s closed when selling such a position without receiving any cash dividend payments, which would be generated if we were holding upon underlying shares.
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