Eagletrader traders share psychological traps in trading: lose money and lose money and greed

　　In foreign exchange trading, price fluctuations roughly show three states: upward trend, downward trend and consolidation trend
, traders should follow the principle of following the trend and never place orders against the trend. But the reality is that many traders not only fail to stop the loss in time after being trapped against the trend, but instead choose to add orders in an attempt to lower the average cost. This is the fluke mentality caused by losses. They thought to themselves that the market will always reverse, and they can wait until the day when they make a profit if they persist. However, the market trend will not be as expected, and counter-trend operations often make losses bigger and bigger.

　　Luck by luck

　　Some traders like to use lock orders to handle the order after making a wrong order, that is, lock the original loss order with a new order. This operation seems to be able to temporarily balance the psychology, and we expect to open orders to achieve profitability when the market reversal. But in fact, when re-examining the transaction, traders often instinctively close the profitable orders first and retain the loss orders.

Most of the time, the market will continue to develop in the direction of losses, and traders can only keep locking orders and unlocking. As a result, there are more and more losses, and the unlocking process has become counter-trend operations again and again. Even if I occasionally catch a small rebound, I am unwilling to cut the order because the loss order is too deep, and the losses will continue to expand.

It is easy for beginners and veterans to be
“Floating orders” (that is, the loss orders are always held) falls apart. Ordinary traders are used to placing orders based on their feelings. Once they place orders blindly, they will be depressed and extremely nervous. Even though I knew the trend was hopeless, I was still lucky, indecisive, and constantly relaxed the stop loss price, and even had no stop loss plan at all. I always imagined that the market could completely reverse at the next resistance point, but as a result, I would be greatly damaged if I lost one loss.

　　Winning for greed

　　Compared with the lucky mentality of losing money, it is the greed mentality of making profits. When traders place a purchase order, the price continues to rise, and greed begins to ferment. They feel that the price will rise even higher, so there is no need to rush to appear. When the price began to fall, I thought about observing and observing again, and the order changed from profit to loss, and I was even more unwilling to close the position. Wait until the end, forced to cut the positionDuring the field, there were already heavy losses.

Many people have this experience: orders that lose money are dragging again and again. After losing hundreds of points, they finally waited until the loss narrowed to dozens of points, and then wanted to close the commission before appearing; when it was really time to close the commission, they hoped to make dozens of points more…
The result of this greed is that the market seems to be deliberately against it, always turning around when it is a little bit away from the expected closing price, and never returning.

After experiencing several losses, traders will go to another extreme and become afraid of the market. Even if you occasionally see the trend and place an order price is good, as long as you have a little profit, such as getting ten or eight o’clock, you will start to be nervous, and finally earn more than ten or twenty o’clock, you will close your position in a hurry. If you lose money, you will not dare to take it when you make money. If you continue to do so, it is not surprising that you will lose all your capital.

　　Strategies to deal with trading psychological traps

　　Set stop loss and stop profit: Before trading, set stop loss and stop profit levels based on market volatility and your own risk tolerance. If you hit the stop loss, you will resolutely implement it and make a profit that meets expectations and decisively fall into the pocket.