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Being aware of your ego and controlling that in forex trading

Enlarging Position Sizes

Confidence grows when one has been trading for a while. It is at this point that the desire for greed can creep in, and to make more money, you expand your positions.

Doing such actions can be the quick way to erase your account: many traders will tend to disproportionately expand their position sizes, at sizes that are much larger than the profit they earned in their accounts, abusing the offered leverage.

The rules of money management are forgotten, then within a few bad trades the liquidation of the account can occur.

Holding on to a position for too long

For your trade, all analysis was performed carefully as usual, and a position was entered. Now, the market is moving in line with what you had expected it to do in your analysis. Terrific! Great! You didn’t place a take profit order, though, or maybe the pair didn’t just hit it. It’s close, but it hasn’t yet been reached.

So, are you “letting your winner run” and not settling for a partial profit? Greed is telling you to do that and fear is telling you to close the trade. Moving the Stop Loss order to the break-even point, or taking some profit, could be a compromise.

Too many traders tend to do nothing, let the positions float and hope that the price will reach their profit or continue to move forever in their direction. In particular, with many fast-changing fundamental themes, one must look at being satisfied with the gains on offer at this current volatile time.