I remember paying big bucks a couple of years ago for one of these giant motorized guys that gets you around and I call it an SUV.
Oh boy, that sucker was huge!
As I sat in my new (used) car, images of climbing mountains and traversing desert terrain filled my imagination. Climbing hills, climbing rocks, climbing mountains, here I come!
And then…a tap on the shoulder. The seller woke me up from my coma from drooling to show me the final purchase price.
amazing! shock!
The pictures of grandeur were gone and now all I could see were all numbers followed by commas and more numbers and numbers… what a “huge” purchase it turned out to be!
No matter if it’s a five-dollar roll of toilet paper or a new car, I always feel buyer’s remorse(s) when buying.
Forex trading can be very similar. We put our money (real or demo) on the line in pursuit of financial gain and happiness.
Our trades are placed in abundance when there is potential for profit, and we rush in at lightning speed when the crowd starts selling in droves. “Hurry, everyone outside!”
We don’t want to be trampled on or left behind, right? So with the slightest unexpected movement, the masses fear that the worst is imminent. They get out as fast as they can, and we, of course, follow.
This fear (and greed for some) becomes a controlled emotion, dictating their currency trading decisions and behaviour. Regret is a powerful emotion like fear and greed.
Regret is similarly controlling because it can prevent us from making a deal because we don’t want to make a mistake. We want to feel good about our decisions and strategies.
In our attempt to feel this way, we find it uncommon to walk away from making a deal altogether, avoiding any risks of failure. However, taking on this avoidance mindset will certainly not lead us to the earning potential we seek.
Regret comes after we make a decision and then start imagining things that could have gone differently.
When trading, regret is an easy feeling because it can happen when you make a move or when you don’t do anything at all.
For example, you open a trade with the best of intentions, only to stop it losing your entire account balance. You automatically regret taking that position and now being poor.
On the other side of the coin, don’t take a position because you are sensitive to risk.
Turns out your missed opportunity was the trade of the century, and it could have made you a millionaire! sleep it! You slip into a state of complete remorse.
For both examples, it’s easy to imagine what humans might have. We imagine ourselves in those “winner” realities and how heavenly everything is. But then we go back to earth where things are definitely not heaven.
We’ve all experienced compliments with regret, but they can actually be helpful to us. Sometimes regret can give us that extra kick in the ribs to get off the ground and get back on our feet. It forces us to right the wrong we made in the beginning.
When the going gets tough and you lose another forex trade, instead of crying in the corner of your bathtub, the answer to your mistake is to reevaluate your strategy and the market. You do more testing and try your skills on another new trade. Want to get back that losing trade!
In the last example, we used the regret we felt over our mistakes to motivate ourselves and encourage us to try again. Taking this new perspective when things are not going as planned will have a positive effect on your mental behavior and your trading as a whole.
Don’t stop losing. Forget about it and move on!
However, some forex traders have a problem with feeling remorse even before making a trade. No action is taken, but your anxiety begins to devour the mind, and all they can think about is making a mistake.
In this case, the possibility of an unfortunate outcome prevents them from acting.
To help, we must remind ourselves that this is not the end of the world and that there is still time to fix what isn’t working. We cannot change our previous trades but we can certainly create new trades to get those profits back.
Again, the key here is action; The goal is to make a trade. Don’t let regrets hold you back from moving forward through the action.
And remember, not all risks are bad; Taking very little and calculated risk is an integral part of growing into a successful forex trader.
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