Greed is deep in people’s subconscious. With a trader, it is easier to break out. Having to witness the flow of money every day will distract them, causing them to act blindly and ignoring facts as well as statistics. Wrong decisions all come from emotions. Therefore, if you know how to limit them when trading in IQ Option, you have already been halfway to success.
Wrong mindsets of traders during IQ Option trading
If you bring along with you incorrect perspectives about the trading profession, your path will be very difficult. This is something that beginners never accept without being told by their predecessors.
Greed mostly comes from false assumptions about confirmation bias. That is, traders will find convincing evidence to prove their strategy is correct. They ignore constructive comments and make things go their way.
For example, the gold price on July 6, 2020, continuously set new peaks and increased wildly. Most traders thought that the price had been at a too high level compared to the previous years. In order to reinforce their judgment, they were willing to use all kinds of arguments to prove that they were right.
This way of trading still happens every day in IQ Option. But in reality, we are dominated by greed without even knowing it. There is no reason for the price to drop on a consecutive breakout. This is ridiculous. If you believe that it will be profitable to place a sell order, then you are getting distracted by greed.
The best way to fight against it is to form a set of principles and learn to defend yourself. There should be several scenarios for a strategy to limit greed in trading.
Setting ambiguous goals
One manifestation of the mentality of greed is to set profit targets too high compared to reality. Many traders set very high targets for profits without evaluating their own abilities
Almost every system and strategy undergoes volatility and drops. However, many traders do not admit this. They often think that the trading system will be more profitable.
However, you need to understand that the market will crush your expectations regardless of your mood.
The profit that you want to make even the smallest is also an expression of greed. However, your greed should be based on reality and possibilities. When setting profit goals, you should look at the amplitude of the rate fluctuations. From there, you can give out goals that are within your reach.
Not knowing where to stop
There are many cases where you have gotten the exact profit as expected. However, greed makes it impossible for you to stop. And then, you decide to continue trading.
If you are profitable, you decide to stay to increase the profit. If you lose, you decide to take it back. And all of the above actions are caused by you acting according to your own feelings. It is an expression of greed when you have won and want to win more. This can turn a profit into a loss. Most traders lose when they are driven by emotions.
One thing that traders have to learn is how to distinguish where mistakes come from. Is it due to trading knowledge, market judgment skills, or errors from greedy psychology? From there, you can come up with a roadmap to improve the weaknesses and promote the advantages.
The more you observe the market behavior, the more you will find that the psychology of the trader works in stark contrast to the beats and cycles of the market. So, always be conscious of psychology, discipline, principles to make the right decisions during trading.
Things to train for trading psychology
Psychology is an important factor contributing greatly to making profits. It often takes time for traders to train steel psychology. But if we have learned to control, the trading results will gradually improve in a positive direction.
Believe is the filter for your spirit. It summarizes important information during trading. It will help you refine and evaluate the information related to the strategy, and ignore the irrelevant information. Trader’s trust will help them to make their own judgment correctly.
If your trust assumes you are doubting and apprehensive about the quality of the strategy, then your approach to the market will change to that skepticism in a negative way.
Change your mindset
Most traders know that greed and fear are both negative states in trading. However, to understand and to give a remedy is also very difficult and requires perseverance.
When we make large and consistent profits, it is easy to come to overconfidence. The excitement now overwhelms our fear and makes us ignore caution. It drives you frenzy to make more profit by trading continuously. They will often ignore existing profit protection and disregard risk management. So in this state of mind, they often make the wrong decisions.
Another equally frightening mentality is fear. This type of mentality is somewhat more realistic because when people are feared they are more vulnerable. Fear makes traders not dare to place orders and fall behind. It makes their growth almost zero over time when they are not confident to place orders.
4 tips to help traders overcome psychological barriers in IQ Option trading
1.Set your trading principles and stick to them. Especially, never break the principle set by yourself.
2.Never make an arbitrary trading decision. Instead, before you trade, ask yourself why you trade. Find proof that your trade is reasonable and valid.
3.Make a statistic of the evidence that can make your strategy fail. If you find a lot of evidence that your strategy is more likely to fail then it’s best not to trade.
4.You are investing, not gambling. If you want to take revenge or open many orders, etc. then never excuse yourself. Remember, don’t find a reason for the problem. To better trade, you have to be the one to find the cause of the problem and fix it.
Psychology is a persistent problem for investors, so let’s start training ourselves now. Although psychological training requires a process to achieve good results, you will feel your trading mood changes over time. When you see trading more comfort, it shows that your psychological adjustment efforts have paid off.