Do you know what is the number one reason traders lose money in the Forex (or any other) markets?
They trade with emotion!
Think about it. whenever we let emotions rule our decisions we tend to make bad decisions. This is true in all aspects of our lives. However, when emotions and trading meet your bank account will feel the pain. Now I am not suggesting that we can be de-void of human emotions when we trade. What I am suggesting is that you do not make trading decisions based on emotions.
It is especially key to avoid the most common emotion that drives traders – Fear! Fear of loss, Fear of missing a big move, fear of staying in a trade too long or getting out too quickly …. fear … fear … fear. Being ruleed by fear when trading is a sure recipe for losses. It becomes a vicious cycle. The more you loose, the more you fear and you start second guessing every trade. All traders have experienced this. What separates the winning traders from the losing ones is that the winners learn to remove their emotions from their trading decisions.
Now you might be thinking, "Ok, well that is easier said then done"! Actually, it is very easy to do! You just need to trade like Spock from Star Trek fame! In case you do not know, Spock has no emotional capacity. He was totally driven by pure logic. That is the only thing he understood and could respond too. Emotion never came into his thinking. Just like emotion should never come into your thinking when making trading decisions.
So how can you trade like Spock? It just so happens you can easily accomplish this when trading the Forex. You can employ Trading Robots or Expert Adviser's (EA's). They are computer programs that are designed to automatically make trades based on the logic built into the program. When the trading criteria programmed in the EA are trigger a trade is executed. Emotions never come into play. These programs can not second guess a decision to get into a trade or get out of a trade. Unlike humans, they can never break the trading rules they were designed to follow.
Automated training programs have been around for a while now and have pr oven themselves in real trading. There are many different EA programs out there. So no matter what your trading style is you can find an EA to make trades for you. Keep in mind though that not all robots or EA's are created the same.
You need to do your own due diligence and before using any EA in live trades I suggest you test it in a practice account. Once it proves itself set it up and let it get to work for work for you.
When it comes to making your trading decision, check your emotions at the door and as Spock would say, "Live Long and Prosper."
Source by Joe McDougal