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control greed!

  • #1
  • First Post: Oct 29, 2007 11:12am Oct 29, 2007 11:12am
traders are controlled by two emotions fear and greed.
we all know how to control fear but when it comes to greed, it's hard to control as it's much more stronger than fear.
at least, we can recognize fear but greed,I don't think when we can realize it till after-the-fact.
and it gets worse , when greed is mixed with euphoria specially after a winning streak making us as traders feel like we broke the market's code!.
so how can we practically control greed and recognize when we feel greedy?

one of the things I came up to is having a trade plan and stick to it till end and stick to the practice of filling trading log sheets before before executing the trade.

any experiences?
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  • #2
  • Oct 29, 2007 2:55pm Oct 29, 2007 2:55pm
1. Keep track of every trade, how far did it go in the money (max possible profit)?

2. If the trade had gotten stopped out, how big would the loss have been?

3. Tabulate the data and calculate the average max profit and the average stop loss amount.

4. Figure out the probabilities -- the expectancy of your system at different t/p and s/l levels.

5. Always use that t/p and s/l. Set it and walk away.

Or, just do what I do. Always use a 5 pip t/p. It's hard, very hard to do, but your percentage of wins will approach 100%. As time passes, you can put on bigger trades as confidence grows.
  • #3
  • Oct 29, 2007 3:03pm Oct 29, 2007 3:03pm
BTW, I believe there are any number of emotions that influence trading.

serenity
enthusiasm
cheerfulness
conservatism
boredom
antagonism
anger
hate
fear
despair
grief
self-abasement
victim
apathy
blame
regret

are a few
  • #4
  • Oct 29, 2007 3:08pm Oct 29, 2007 3:08pm
My problem is more about fear than greed. I can't stand to see profit in a trade go to nothing. I usually get fearful and take profits early, then price will take off in the predicted direction. I've been working on this problem, by locking in a portion of profits and letting the rest run.
  • #5
  • Oct 29, 2007 3:48pm Oct 29, 2007 3:48pm

"The point is, ladies and gentleman, that greed -- for lack of a better word -- is good.
Greed is right.

Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind."




but seriously the old 'plan your trade, trade your plan'
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  • #6
  • Oct 29, 2007 4:16pm Oct 29, 2007 4:16pm
@Blueruby,
Ur points are great specially when building a high expectancy system.
setting predetermined s/l and p/t and let the trade go is one solution and the one I approach with the specific MM techniques ( entering the full position at once with no splitting)

@mbqb11, greed is good in all aspects of life but when it comes to trading, I think not.
The trading game is different than life!.
do u think fear is good for us as traders??
Fear is an essential thing for human survival but in trading it's not.
if u fear a trade, u will let it go and will end up picking the losers!
Greed is the same, u will end up holding too long hoping for more profits till ur winners turn to losers.

and at last, one of the dreadful and fatal mistakes that greed cause us,traders, to do is to PLUNGE.

I think no other mistake can wipe out a year of accumulated profits like plunging that caused by greed and euphoria complied to make a trader think that he broke the market's code and then as a result break his own rules and do not following the system.
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  • #7
  • Oct 29, 2007 7:21pm Oct 29, 2007 7:21pm
Quoting CHFJunkie

@mbqb11, greed is good in all aspects of life but when it comes to trading, I think not.
The trading game is different than life!.
do u think fear is good for us as traders??
Fear is an essential thing for human survival but in trading it's not.
if u fear a trade, u will let it go and will end up picking the losers!
Greed is the same, u will end up holding too long hoping for more profits till ur winners turn to losers.
my last post was simply b/c i love the movie wall street

but my serious answer is this. In my trading I am both fearful and greedy. The most important thing though is my trading plan. I am a trend type trader. So I have no set profit targets(for the most part). Instead I trail my trades, which means when I enter it, the sky is my limit. So is that being greedy? Maybe, but in quite a different way. I also respect the markets. Call it fear maybe, hence why I have a trading plan(that has stops and rules). I learned awhile ago that most people are cutting their winners and riding their losers. So instead I develop my trading around the complete opposite. The hardest part for most is then having the discipline to follow their trade plans. That is where the wrong part of fear and greed kick in. So I think fear and greed is a good thing, if you can use it in the right way.

Take care
Mike
  • #8
  • Oct 29, 2007 8:54pm Oct 29, 2007 8:54pm
Quoting CHFJunkie
@Blueruby,
...

and at last, one of the dreadful and fatal mistakes that greed cause us,traders, to do is to PLUNGE.

I think no other mistake can wipe out a year of accumulated profits like plunging that caused by greed and euphoria complied to make a trader think that he broke the market's code and then as a result break his own rules and do not following the system.
Controlled greed is good. Uncontrolled greed is bad.

After a successful set of trades (once a week, once month, whatever) take profits. I don't mean close your trades, I mean literally cash out a percentage of your account. If the money isn't there, you can't lose it. So even if you go stupid, the worst that will happen is that your forex account gets depleted.

It doesn't even need to be a large amount, say 10% of your profits. You can keep it off to the side in an interest bearing account or you can spend it, your choice. But it seems quite few end up leaving all their funds in, hit a bad patch, try to make up for, and lose everything.

It's similar to the reason why I tell people who like to gamble to bring a set amount of cash with them and leave their cards at home. If you don't have it with you, you won't do anything stupid you will later regret.

I've heard one too many stories of:

Friend: "Oh I was up like $2000 dollars but then I ended up down $500..."
Me: "But you only had $200 dollars you were going to gamble with."
Friend: "Yeah, but I thought if I played for a little longer I would get it back."

*sigh*

If you're up $2000, pocket $1000 of it and keep playing. Worst case, you're up $1000. Uncontrolled greed vs. controlled greed.

~X~
  • #9
  • Dec 10, 2017 11:14pm Dec 10, 2017 11:14pm
Overseeing and managing greed isn't something that will be settled throughout the following couple of exchanges over the course of the following couple of days. In any case, by being aware of how greed can contrarily impact your trading and actualizing the above focuses as a major aspect of your trading regimen, you will step toward the objective of "greed free" trading.
  • #10
  • Dec 11, 2017 3:44am Dec 11, 2017 3:44am
You can use the method of substitution of emotions. If you are tormented by fear, then you can use the switching of attention to funny moments in order to replace the feeling of fear for joy, also, you can use every situation as an excuse for a joke. Sometimes it may look stupid, but when you face to face with the market, your fear will be replaced by a good mood
Point of view is a common opinion, passed through the prism of experience
  • #11
  • Dec 11, 2017 12:39pm Dec 11, 2017 12:39pm
Most of the traders lose money because of greed. There is no place for greed and fear in trading. Regardless, this trading regimen is not for the unassuming or leave heart. Lift hasty thoughts considers to a high-chance profile where plan is essential and particular organizing is a sure basic if a trading learner is to survive.
  • #12
  • Dec 12, 2017 11:29am Dec 12, 2017 11:29am
When you trade on the need to quickly build up your balance and make money your trading will not be good, Try trading pressure free without needs and you will see how much better and how easy you take winning trades.

Try and have fun and enjoy your trading...thats when things start happening.
  • #13
  • Dec 15, 2017 1:50am Dec 15, 2017 1:50am
Greed and fear are the same thing - greed is fear.
  • #14
  • Dec 15, 2017 3:26am Dec 15, 2017 3:26am
Quoting tomorton
Greed and fear are the same thing - greed is fear.
I think they are opposite! Like, greed inspires us to take more positions without proper trading plan! Besides, fear creates lots of negative bias before opening any trade position.
  • #15
  • Last Post: Dec 15, 2017 4:01am Dec 15, 2017 4:01am
Quoting CHFJunkie
traders are controlled by two emotions fear and greed. we all know how to control fear but when it comes to greed, it's hard to control as it's much more stronger than fear. at least, we can recognize fear but greed,I don't think when we can realize it till after-the-fact. and it gets worse , when greed is mixed with euphoria specially after a winning streak making us as traders feel like we broke the market's code!. so how can we practically control greed and recognize when we feel greedy? one of the things I came up to is having a trade plan and...
I think to control emotions is very simple but does not mean easy.
Concentrate on charts not on account balance! This can be achieved with trading plan, setup check list and order tracking. How it will be done depends on each one of us. For example, I write down everything on paper and organize it in folders for each currency pair I trade. In other words, traders must be organized and consistent. Trading is serious business and we have to treat it properly.
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