Today's article will be a direct continuation of a series of articles describing the trader's emotions and their impact on trade, as well as ways to overcome the negative aspects caused by emotions.
In this article we will consider the passion and ...
... Excitement.
Passion is an essential companion of anyone who has ever faced the opportunities quick money.
Even without being a trader, a student, I was fond of card games, especially clubbers (Debertz, debchikom). This game is remarkable in that the aspect of luck it is virtually absent. 40% success rate - is a skill and experience, and 60% - is the psychology. I have long and successfully gambled. However, when I started to capture the excitement, I started to play very much. So much so that my debts exceeded revenues, in particular - the debt to a local authority. Once settled, I threw the card forever. However, to start trading forex, I am again faced with passion and drain deposit because of the latter.
The reason for the loss was the overconfidence in their abilities, which accompanied my success.
Most traders also faced with passion. Before describing the problem of negative influence of this passion in trading, we would like to refer to authoritative sources, and to describe what is, in fact, it is the excitement.
The excitement - is an emotion, anticipating success. And the most important feature of gambling is inadequate perception of success. Passion for irrational actions may be even the slightest hope of a "success".
Often the cause of the irrationality and emotions lies in the exposure of false hope.
Hope - emotions associated with the expectation of meeting the needs, the need or desire.
In the excitement and expectations are very similar definition, however, despite this, the hope is neutrally colored by emotion. This feeling is not such a strong influence on the rationality of the trader's actions, although in rare cases, false hope is much more dangerous than fear.
Excitement is much more associated with fear. Namely with the fear of loss of deposit ...
About the impact of fear on the success of the activities of the trader can be found in the corresponding article.
Excitement - all whether he attends?
Sadly to admit it, with passion and its consequences experienced absolutely all traders. The reason for such general phenomena are:
- Modern advertising;
- The reasons that lead people to the currency exchange market.
What people are attracted to forex? Everyone, regardless of whether he is a trader or not thought about this issue.
The first thing that entices people into Forex - is the possibility of earning from home. As well as making money with one click, sitting at home in a comfortable chair, sipping coffee, rather than vegetating in a stuffy office.
Oddly enough, however, domestic work involves a much larger investment of time and effort than many people think. To confirm this, it suffices to refer to any freelancer, working more than one year on the labor markets. Experienced traders also confirmed this factor.
Often, successful trading forex involves several etapov.Pervy stage - it's a long training with the study of various trading strategies, as well as an analysis of the global currency market and interbank foundations of the economy. It passed its people subjected to harmful influence of emotions and passions.
The second stage - the creation of its own strategy and trade on the forex currency exchange. This strategy involves the creation of as the economic aspect, which follows directly from the first stage, and the psychological. It is impossible to properly develop a trading strategy, while under the influence of fear and excitement.
The second factor, which attracts a lot of people, but also stimulates their passion - it is an advertisement. In the role of stimulator of excitement is not so much advertising of forex as a business course, which "allows you to earn millions of dollars after training." Of course, a certain sense from these lessons there. People who attend master classes, beginners avoid some mistakes. However, on the other hand, they are faced with their own self-confidence and lose more than gain.
At the same time I was always very worried about an important issue. Why are these teachers, who know the secrets of earning millions, do not always are millionaires, and where they have taken time and effort to train others? The more people know the secret of real earnings, the less it will yield the secret of Finance. A ridiculous prices on trade training in the foreign exchange market are undermining the credibility of such schools in the hundreds of times. The only real exceptions are the millionaires who tell outdated earnings methodology. However, the cost of such a workshop is thousands, if not tens of thousands of dollars.
... Passion and forex.
With the excitement of forex facing both beginners and professionals. At the same time the cause and effect of excitement for beginners and professional traders are very different.
The main causes of excitement Forex beginners:
- The success of the first operation (as a successful investment can double a deposit transaction);
- The desire to get rich;
- The desire to win.
The first factor can serve as an impetus for the emergence of third - received the money after the first successful investments and lost a deposit to the following people, knowing that they can not only play, but to win, put a lot more.
As you can see from the list, for beginners forex trading it is something like a casino.
And the truth is, if you do not know the principles of operation of the market, the forex is really a game at random. In this case the possible success rate, without prior analysis and the availability of the strategy tends to zero.
However, entering into a state of rage, which is due to the five - ten successful transactions, an experienced trader may also give in to passion.
The danger of excitement.
It is important to understand the fact that gambling is not always an absolute discharge satellite deposit. There were instances when experienced traders, succumbing to gambling and betting by making thoughtless, enriched by hundreds of times.
However, the main danger is the lack of excitement in the logic of betting. This factor makes the forex in the "roulette", where the chance of winning 1 in 1000.
The greatest danger is the excitement when he meant by a "desire for revenge". For example, a novice trader, has not yet developed its own trading system, can repeatedly be drained deposits, each time increasing the amount of their investment in 2-3 times.
History is silent about these traders, but there is speculation that they are entering into a rage, take multiple loans, but ultimately left with nothing. This behavior is similar to gambling, and the availability of many forex contributes to its development in new traders.
Leverage a destructive habit gambler.
The possibility of operating leverage - a chance to get rich quick. And it is this desire also destroys most novice traders.
Let us examine the case of the example.
Without leverage people in terms of their own means, with an increase rate makes 3-4% of the money invested. However, in case he uses the leverage (which may reach thousands of interest), then converted into 4.3% 300-400%. That's all the reason new traders, regardless of whether they have their own trading strategy or rely solely on instinct.
This all forget about the reverse side of leverage: if the currency fell to a few points, the losses will be staggering, up to 100% of the deposit.
Despite the fact that the probability of loss of deposit when using leverage increases, it is the excitement and the desire to get rich quick is still pushing inexperienced traders use it mindlessly.
Getting drive as ends in themselves.
Perhaps it is no secret that handling large amounts and obtaining winning is ecstasy and lots of positive emotions. Anyone who has ever been in a large casino, seen as a successful entrepreneur is ready to squander a lot of money gambling, and under the influence of drink. In this case, in this particular case, the casino - it is just a way of getting a drive, adrenaline, and money spent will pay off handsomely - emotions that are experienced entrepreneur. However, there are cases where yielding impulse, such entrepreneurs are leaving the casino broke.
Therefore, impulsive traders getting drive is an end in itself.
I am not going to explain this irrational behavior, but it is the same irrationality present in impulsive traders in the Forex market: they are ready to put everything in anticipation of profit, but because of the inconsistency and lack of endurance lose all attachments.
On the other hand are experienced traders that are completely unaffected by the excitement on their behavior. The reason is simple: for the seasoned Forex trader logical always remain the currency market.
Excitement and a dope!
Between passion and doping There exists a strong bond. Doping greatly affects the feeling of excitement.
However, there is one "but": it all depends on the type of doping.
To begin with, that the body of each person is unique enough to be able to argue about the influence of doping. What for one person is a powerful psychotropic stimulant to another will not be affected.
And no need to go far for confirmation. An example would be an ordinary coffee.
Caffeine - a stimulant, which accelerates the blood through the body, causes the heart to beat faster and increases efficiency (especially office workers :-)). However, there are people to whom any kind of caffeine acts diametrically opposite: after drinking a cup of coffee in their eyes begin to stick together, confused thoughts, etc.
Depending on the type of active substance, the result can be either positive or negative. About the influence of hard drugs I previously wrote an article. This is dedicated to the whole study.
Excerpt from the article (Psytheater):
"Numerous studies have long confirmed the fact that psychotropic substances are a fundamental fact which causes the presence of various dependencies. Excitement was no exception. The reason for the regular dissemination of research was the speed of Internet gambling. The team decided to identify at-risk group - people who are most prone to getting gambling addiction associated with Forex trading.
The first step was the study of this group, which was to establish a link between alcohol and drug addiction to gambling in the Internet. OBJECTIVE: To determine how much gambling people are prone to risky and illegal actions. In particular, to the use of marijuana, alcohol and other psychotropic and narcotic substances.
The primary link between gambling addiction and penchant for illegal actions.
The group of people was selected during the experiment, which were prone to gambling on the Internet. The course of the experiment meant to get an answer to the question whether there is a primary link between gambling addiction and penchant for illegal activities - use of psychotropic and narcotic substances. Through the collection of statistical data has been established that: stimulation of consciousness, namely the consumption of alcohol, marijuana and other drugs associated with online gaming addiction. However, the exact proportional or integral connection has not been revealed. Although, with some degree of probability it can be said that the use of psychotropic substances reduced the economic sense of self-preservation groups of citizens during the game that led to a heightened sense of excitement.
That feeling of excitement caused decrease in feelings of conservation, which is the main reason why people would sit at the computer in an attempt to make money on Forex without strategies.
The feeling of excitement in itself is an incentive for the administration of narcotic substances.
The study was found an inverse relationship between alcoholism, drug addiction and Internet addiction game. Have passion has a residual effect. Often dependent on currency games consider themselves more cunning and unrelated law rules. This is the root cause for receiving the narcotic drugs and psychotropic substances. The study surveyed residents further questions were asked. Namely:
- How often a man sat at a computer in an attempt to win;
- How much money each particular individual is won or lost over the past year;
- Whether or not they drink alcohol during the games and marijuana.
To answer the last question was conducted anonymous questionnaires. Anonymity allowed the respondent to avoid problems with the law that might arise in connection with the use of banned substances. The result: most of the people with gambling addiction, was inclined to consume alcohol and marijuana. Three out of four are also addicted gamers or have other problems associated with the intake of substances ... "
As can be seen from the data, virtually every person to discover the path to easy money, it is dependent on a particular group of drugs.
However, the article had not been disclosed the issue of doping influence on the success of trade on Forex.
Doping, passion, success? Smoking.
The use of performance-enhancing drugs can both negatively and positively affect the outcome of the trade.
The most striking example is the abuse of nicotine.
Almost every trader is under pressure during trading on Forex, especially if it is severely at risk. Even if an experienced trader does not feel the excitement, in anticipation of failure of a large jackpot, he still largely feels fear for the success of the transaction, subject to great risk.
Fact: the trader is afraid, even if he is 100% confident in the success of the deal.
It is for this reason that traders smoke that supposedly soothe the nerves.
This nicotine is also a nootropic, which allows more accurate and more profitable to analyze the Forex market.
It would seem that we can say that nicotine has a positive effect on trade in Forex, but it is not.
Nicotine is a direct stimulant of dopamine. Therefore, in case of success, a person greatly changes in the direction of balance emotions of joy and increased levels of dopamine that leads to gamble.
Thus, smoking reduces the stress level in the game on forex, but it increases the chance of gambling that can greatly affect the result of trade.
Therefore, if you are used to monitor smoke, weigh all the "pros" and "cons." Perhaps that smoking will push you to the rash acts that completely collapsed the adjusted trading scheme.
Doping, passion, success? Alcohol and other psychotropic substances.
If the effect of nicotine on the human body and, consequently, to the excitement, impulsivity, and the final result is quite a controversial trade, the effects of alcohol, caffeine and other stimulants, unquestionably impairs trading results.
As well as nicotine, alcohol is a stimulant of dopamine.
Dopamine - a pseudo-happiness hormone, is produced in the case of success, sex, or the use of additional narcotic stimulants.
However, unlike nicotine, alcohol and other psychoactive substances are not nootropics. On the contrary, their effect is largely poisonous to the body and the brain in particular. Already in the first stage of intoxication a person loses rational. After the second degree intoxicated person can not adequately perceive reality. In the third stage intoxicated person can not recall their actions.
Marijuana and other psychotropic drugs greatly alter trader behavior, depriving it of rational grain, and most importantly, a sense of economic survival.
Following the results of a trader, in a state of narcotic passion, he begins to behave like a rookie after the first transaction a success. Judge for yourself how their behavior will affect the success of the trade. What is the probability that it will merge the deposit, which is saving up for a few years?
However, even small doses of psychotropic impact on the successful traders as stimulating dopamine largely blunts logic.
Conclusion: more or less safe dopamine stimulants (drugs) - is nicotine and caffeine. The first acts as nootropa second gives burst of cheerfulness. However, when iterating with any of the components, a sense of proportion and self-inferior to other, more destructive emotions for a trader.
Note: a separate category of drugs are nootropics. They do not bear any harm to trading, however, can greatly improve the results thereof. Nootropy able to increase brain reserve. This increase makes it easier to analyze the market, remember more information and, therefore, faster to develop your own trading strategy on forex. Despite the fact that the effect on trade nootropov indirect currency, it is certainly positive. The safest nootropic to help verify the correctness of this judgment, is piracetam. It is not addictive and does not harm the body.
