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Fear and Greed - Bad or Good?



The word Greed is the selfish desire for or pursuit of money, wealth, power, food or other possessions, especially when this denies the same goods to others. It is generally considered a vice, and is one of the seven deadly sins in Catholicism.

In FOREX, people who trade will typically view fear and greed as the enemy. However, there are some good parts of these emotions. All traders experience emotion.

Let's identify the good and negative methods in which fear and greed control your forex trading.

The Good Side:

  1. Greed gets us into the Forex market, and makes us want to stay.
  2. Greed pushes us into trades that meet our criteria.
  3. Fear of loss convinces us to put in the effort and time needed to develop a good plan of trading.
  4. Fear and greed make us become more confident traders.

The Bad Side:
  1. Fear causes us to stop on our wins, fearing we will lose our profits.
  2. Being greedy causes us to ignore our money management regulations and exposes our portfolios to the possibility of catastrophic losses.
  3. Fear causes us to lay aside, having not pulled the trigger, even though the opportunity matched our criteria.
  4. Greed will trigger the impulse to make a trade when the market is on the move, because we don't want to miss the chance, even though it violates the rules that we have set.
Fear and greed may destroy our profits, they can also inspire and drive us to become better traders. Consider the list above and determine in what ways fear and greed affect you and the decisions you make. Capitalize on the positive and try to eliminate the negative.

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9 comments:

Michael said...

I never thought of it that way, but greed is certainly a contributing factor to becoming wealthy.

Nice post

Bhing said...

@Michael - yes you are right! Greed is a contributing factor but of course, make sure to set your limit.. There's always a good and a bad side on everything..So better to balance it...

haziqruzaini said...

Both, fear and greed must exist to make others live fair and square.

KJ Flip said...

very true... nice blog, hope you follow mine too

Bhing said...

@haziqruzaini, you are right they both should exist but it still runs on how you balance them..

@KJ Flip, thanks for the support :)

Robin said...

Sometimes you have to risk it to make it! The key is moderation...in all things.

Nice, easy to understand posts!

KJ Flip said...

yeah i'll do that

johnlazy said...

I don't really have an idea on forex trading but it is a nice site

Bhing said...

@Robin - Risks are everywhere! So i think you are right, moderation is the key.. Proper moderation can help you to manage it.

@KJ Flip - Good for you :)

@johnlazy - thanks for dropping by! and thank you for the support. If you try to come back here always, you might would have an idea how forex trading works..

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