How to cope with psychological pressure?
Making transactions with non-deliverable OTC financial instruments in the OTC Forex markets is a very difficult test from an emotional point of view. Prices sometimes move very fast, and if you become a witness of rapid profits or losses, your psyche can make you make impulsive, thoughtless transactions in which there is not a drop of rationality. That is why it is so useful to create a trading plan and use it throughout the entire trading process.
Below we will consider the most common situations in the market and how to overcome them.
Each client expects that his market analysis will be correct and that the transaction will be successful. But this feeling disappears at a time when the market begins to go against you. At the sight of losses, many clients delete or rearrange orders to fix the price of the Stop Loss underlying asset, hoping to outstrip the negative movement, and as a result, lose several times more than planned. Clear adherence to the strategy will help to avoid this state. Even if prices are not moving in the direction you were expecting, don’t worry and let the transaction close at a stop loss. Remember that you will catch up next time.
Fear of opening positions is common, especially for novice clients. Naturally, all this is due to the unwillingness to suffer losses. However, you must remember: loss is a common part of the game, and you must not let fear prevent you from making a profit. If you can’t cope with your fears for a long time, try switching to longer intervals, in which case you will have to open positions much less frequently
This is one of the most unpleasant and harmful emotions in trading. Greed makes you pursue the market when the movement is already dry. Also, in the wake of greed, you can open transactions with an unjustifiably large volume, delete stop loss and, in the end, completely stop following your strategy. For this, you need a trading plan. Many clients try to follow only those rules that are written on paper. Perhaps you should follow their advice, in which case you will always have a visual reminder before your eyes every time you open a new position.
Leave the emotions outside
The best way to protect yourself from negative emotions is to treat transactions with non-deliverable OTC financial instruments as a business. You must create a detailed plan of operations for each possible market scenario and clearly adhere to this algorithm in practice. Remember that even the most successful clients incur losses: they are part of the process of conducting transactions with non-deliverable OTC financial instruments. The main thing is that you can learn from your mistakes and not repeat them in the future.