5 Negative Effects of Revenge Forex Trading
One of the most dangerous counter attacks in the forex trading industry is the manner of endlessly placing your positions one after the other with a hope that you will be able to get back the exact if not more profit to fill in your losses. In most trading advice, experts strongly encourage traders to be open minded in terms of accepting losses. Even trading psychologists can attest that revenge trading is emotionally and physically unhealthy. Thus, traders are advised to be aware of reactions towards losses. In addition they should also know how to assess if their moves are already demonstrating revenge trading or not.
The Effect of Revenge Trading in the Body
Behind the superficial reason of obtaining a break even from every loss lie greed and pride from deep within the practice. As a trader, we perfectly understand that we do not want our investment to merely disappear. On a scientific note,losses trigger our body’s production of cortisol,a hormone which is responsible for feeling anxiety and panic. If this happens, our ability to think logically may be compromised. We start to think negatively because our mindset about trading is to earn profit and when things don’t go as expected, we think of it as a failure. In particular, we experience the following:
1. Immersing ourselves into a world of shame and anger due to our refusal to accept our losses.
2. Wishing to avenge what was gone and we will never stop until we get more than what we want.
3. We develop an obsession turn things against the tide
4.Turning ourselves away from the people who are ready to provide comfort after a devastating loss.
5. We start to doubt our trading skills so we do not settle into a specific opportunity.
Rescuing Yourself from the Snake Pit
When you realize the fact that you have fallen into the trap of revenge, you do not have to feel disappointed because there is still a chance to bring things back to normal if you are willing to help yourself. Here are suggested activities that you can do to recondition yourself.
1. Give yourself a break
A good drive, walk or any outdoor activity will help you pause from the pressure of looking at your trading status. This will help you feel relaxed and reconditioned.
2. Seek Financial Management Services
If you feel that you can no longer take the pressure that is brought by the unpredictability of the market, then you might want to consider getting helped by financial managers. These individuals are people whom you can employ to take charge of your accounts on your behalf.
3. Rehearse your strategies on demo accounts
If you would like to assess the effectiveness of your trading skills without risking your assets, signing up for a demo account is the most advisable move that you can do.
4. Observe expert traders and learn from their strategies
There is nothing wrong with getting inspiration from successful forex trading enthusiasts so as to build your confidence. Be reminded that the challenges of this field can only be defeated through humility, intelligence and patience.