3 signs of emotional Trading

Emotions play most important part in our lives and obviously they affect each and every section of our life, be it our personal or professional life, going against the classical theory of keeping your personal and professional lives separate, science has proved it many times that you cannot divide your life in two parts.

 

1. I like to follow or copy trades of my IB/senior trader. 

Very often we see that traders simply start following some senior traders or there IBs, instead every trader should analyze where the market is moving, a trader should be aware of what is going to happen next in the market, the best chess players across the globe, they are generally 5 steps ahead of their opponent and here your opponent is market, so instead of following some another person, every trader should read the technical analysis, fundamental analysis , market news and only then he should trade.

2. Are you counting profits before trade is completed?

A lot of traders check their profits and losses every single hour and they start feeling very happy when the trade is going in their direction and if the trade is going against them they assume that this is a temporary phenomenon. BIG MISTAKE. 

Psychologically traders should think opposite that if a loss has happened, a trader should understand that this was a real loss which and at the same time, if the trade is showing in profit, it is not realized until unless you close the deal. This mentality puts the trader in the right state of mind.

If you are thinking that a loosing trade would turn around and convert in profit then you are just fooling your mind by emotions, trust your technical indicators and your knowledge about market more than your emotions, if the charts and patterns indicate that you should close the deal then please close the deal.

If you are in profits and you think "oh wow I am an Awesome trader", at this moment you are flying in your emotions again. In this state you will ignore the charts and patterns even if they are saying that you should close the trade and exit the market, you would not listen to that, the best advice for this state is that DO NOT trade for next 2 to 3 days after making huge profits.

TRADING REQUIRES super heated logical analysis not burning emotions, if you stop trading for next 2 to 3 days, you would feel much balanced and you will see that your trades are balanced and you have consistency in trading.

Political Crisis Threatens Credibility Portugal Finance

Of Zone Europe reported, the risk of a political crisis in Portugal seem to threaten 'financial credibility' government that has been built since the last 2 years through a number of austerity measures and economic reforms, according to European Commission President Jose Manuel Barroso said.  

A market reaction suggests that the risk is very clear that, the financial credibility that has been built by the Portuguese government could be threatened political instability at this time. and if this is really the case, would be very damaging to confidence in the Portuguese, especially because they have seen early signs of economic recovery.  

While another reported a statement, the European Parliament has passed a budget proposal the European Union (EU) in 2014 to 2020, after passing through a long debate between governments, parliaments and executives in the region.Political resolution proposed EU budget for the period of seven years, cut spending for the first time after being approved 474 votes, 193 against and 42 abstentions. 

Keep ECB Interest Rate, And Ready to Make Loans Marginal

The European Central Bank warned of Latvia, which is a candidate member of the European Zone area to keep long-term rates, where inflation is currently at a low level. 
In a progress report on economic and law, 2013, Latvia was in the path to the euro zone members. However, the ECB highlights the sustainability of inflation convergence.

This report will be a major focus at the European Parliament, and euro zone finance ministers decided on July 9, whether Latvia can join the single currency or not.If the decision is positive, Latvia will be a member of the euro zone into 18th on January 1, 2014, following neighboring Estonia joined in 2012. 

EU Urges France Pursue Targeted Economic Reform

European Commission President Jose Manuel Barroso said France should present a credible structural reform program, after new data showed Europe's second largest economy is slipping into recession. 
Barroso, who will meet with French President Francois Hollande in Brussels, said that, as directed by the European Union (EU) France to pursue reforms two years to bring the budget deficit down to 3 percent of economic output as promised. 

"The extension will be approved if the French present a credible reform program so that it can regain competitiveness," Barroso said, as quoted by Reuters on Wednesday (05/15/2013). 

Earlier, the French parliament passed the state labor reform, as part of Hollande's efforts to convince the European partners that it is committed to economic reform. 

Dollar Strengthens, Effects Of, The Fed Strategy

Wall Street Journal report indicates that the Federal Reserve has mapped out a strategy to reduce the bond purchase program. And it certainly has helped the U.S. currency to strengthen. 

Developments in recent U.S. jobs data, have shown hope for an end to the weakening of the U.S. economy due to employment data. 

While the United States trade exchange returning slick performance recorded last week. The third main index gain success plucking for three consecutive weeks due to large buying interest from market participants. Rally likely to get longer because of some important data releases ready to go out in the next five days.