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Difference between natural and emotional loss

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#1 sandysr



  • Traders-Talk User
  • 7 posts

Posted 06 July 2017 - 08:27 AM

Losing in Forex is natural. It is part of learning how to trade the market. Though every trader in this market loses, they lost in this market for two reasons. They lost in the market because it is how the market works or they have lost in the market because they were emotional. The professional traders in the Swiss trading community always trade without any emotional attachment. They know very precisely that if they don’t control their emotions they will never be able to place themselves in the line of the profitable trader. In this article, we are going to explore the amazing mindsets of traders that make their loss difference in the market.


Natural loss in forex

The natural loss in forex is the loss that is a part of your strategy. As you cannot win every trade of your market, you develop risk to reward ratios to make that your loss does not exceed your investment. This is the natural loss in Forex. It is a part of trading in the market even if you have the most working and consistent strategy. Professional traders in the market also losses and if you are having a natural loss in the market, it is completely normal. Even after doing every single thing 100 percent accurately you will still have many losing orders. But losing is acceptable as long as they are managed loss. If you lose a small portion of your trading account there is nothing wrong with it. As long as you follow proper risk management factor and trade with discipline you will be fine in this industry. Always try to use your rational logic to place the trade.


Emotional Loss in forex

This is the loss where emotions clouded the trader’s judgment. If you are emotional in trading, you will take poor decisions and you are likely to lose. For instance, most of the novice traders tend to execute short orders after an extensive bullish rally in a certain asset. They simply think that the price has been trading extensively higher and it’s high time to short the pair. But when it comes to real life trading no one knows when a trend will end. So always make sure that you are not assessing the market based on your emotion. Try to use your technical and fundamental analysis skill to find the best possible trade setup in the forex trading industry.


Difference between emotional and natural loss

Emotional loss is very different from natural loss. Sometimes traders in the market lose their best traders because they are emotional. Emotion is a part of our life but you need to keep aside when you are trading in the market. Emotion does not only refer your sad or happy moments but also your gut feeling that you have when you think you can win this trade though there is no reason to win in the market. If you trade the market depending on your emotional mind, you will only be losing your money. You need to trade the market with your experience and on your analysis, trying to trade with emotion will make you a loss trader in the market. As a new trader it’s true that it will be hard for you to control your emotions but if you don’t learn the perfect way to control it then trading is not for you.


Conclusion: These are the differences between natural loss in forex and emotional loss. Though they are only a loss, a trader lost most of the money in an emotional loss. The natural loss is a part of this market and you can make a profit with your natural loss. If you lost the trade because of your emotion, you cannot make a profit in this industry. Always trade the market with your strategy and follow market trend. If you use your emotion, you will lose the trades.