Greed and how to cope with it

Setting themselves to Forex trading, people face many hindrances preventing them from earning. One of the main hindrances in trading is greed of trader. Even if traders elaborated their own view on market and gained a rather good experience of observation of trading situations, they often do not manage to overcome greed and under such conditions accomplishing stable profitable results is a rather hard goal.

Let's consider the situation, when this impediment starts blocking:

The most frequent moment is when upon opening position and setting Take Profit, trader sees that price moves well towards it and starts shifting this Take Profit hoping to take more than planned; each moment trader's appetite goes up. In the result, upon reversal of price, he cannot close it cause remembers that a while ago profit was higher and greed starts defeating trader. More often, this trader can close earlier profitable trade by Stop Loss because of hope that price will get back to previous profit point.

How to cope with such a negative phenomenon as greed?

Main method here is planning each trading situation, that is to say, Code of rules with Stop Loss and Take Profit levels, handling position including turning it into break-even status, lifting Stops etc. to be determined. If trader will know how to treat trading position in one or another situation until entering it, emotions will not affect as much and consequences of greed will be much less frustrating.

By concluding a deal with clear rules of entrance, trader narrows corridor for greed and won't be able to count money fitfully to find out if it is enough or it is better to wait hoping to take more.

If trader enters transaction without knowing what to do under certain market situation and how to exit it, at certain moment he will being biased and fixed with own material demands thinking how he will spend profit to buy things.

As the situation shows, simple planning of trader's actions and preparedness to various case scenarios helps to cope with one of trader's bitter enemies – greed.