Let's look at how disappointment can ruin even a good trade. For example, you enter a short forex trade on the EUR/USD and the price quickly hits your profit target of +40 pips. You feel pretty good about your results until you see that the price keeps going and you could have had a much larger gain. So now instead of viewing your +40 pip gain as a positive thing you now start to view the trade as a negative because "You could have had more."
So, if you're not a disciplined trader, you start to look at ways to get back in the market to "earn the pips that you just missed". Your next trade is a loss, so now your disappointment is snowballing because you could have had +125 pips on the 1st trade, or at least the +40 pips that you originally took - but now you are at only +15 pips for the day because of your most recent loss. If you're not careful at this point your disappointment could result in even more losses.
I can easily cite this example because it has happened to me more than once. However, I have learned a few simple (not necessarily easy) steps to help keep trading emotions in balance.
Solutions
Let's begin by determining why we are disappointed in the first place. Disappointment comes from an expectation. My wife, who works in the counseling field, has often stated that an expectation is a premeditated resentment. I believes this applies to trading too. So, if we expect ANYTHING from the market we are setting ourselves up for disappointment & resentment. So the 1st step is remove all expectations with regards to our trading.
Secondly, once you feel any sense of regret or disappointment after a trade - Close your trading platform until the feeling passes. This could be a short time period or even for the rest of the day.
Once your emotions are more balanced re-open your forex trading platform & WAIT for the next good trade based on your clearly defined trading system.
So you're saying simply stop trading once disappointment sets in?
Yep! Like I said it is simple but not necessarily easy.
A good test to use is if you're still thinking about your last trade...
then you're not quite ready for your next trade.
