Procrastination to trade is when your trading set up confirms and you hesitate to take trade. Or your trade show all failing signals and you hesitate to close trade to cut losses.
Also, in cases, where you sometimes hesitate to take profit because you want to earn an extra profit beyond your target level.
Procrastination to trade is 100% psychological and so most of the time it happens under influence of emotions.
For example, when one is under the influence of fear, due to having a big loss on a trade. Because you are scared to lose again, it may be hard to make fast and quick decision to take trade.
In the end you end up jumping into a trade late or miss on a good trade. This is because you feel you still need extra evidence that a trade will actually work out.
In the same way, a trader is also likely to hesitate to close to trade when it’s showing all signs that it has failed after making successive consecutive wins.
Or fail to set target profit levels due to overconfidence as a result of having consecutive wins on trades.
At this moment, you feel you know what the market is going to do next and so you know you are right. Once you have this feeling, you are likely to let your trade runs in a big loss because of failure to accept loss.
The end result for procrastination to trade is regret, disappointment, frustration and some times you may quit trading.
Why you should not trade or make any decisions in the market when under emotions?
For instance, I recently met a trader with a 3 years trading experience. As we talked, I asked him how trading is! However, nothing seemed fine. He said, he is about to quit trading. So, I asked why? This what he said;
“I watched this set up form candlestick by candlestick for three days. I saw it confirm but I don’t know why I didn’t take the trade. It just hit my profit target without me.” He said, and goes on to say.
Most of the trade I take always have the best set-ups. They move so well on my watch but as soon as it’s almost target profit, I some how push the target further, a few minutes later my trades just reverse and close on my stop loss with just one candlestick or a few!
It is always so frustrating for me whenever this happens. I know, I shouldn’t have move my target level. It is so heart-breaking losing the money back to the market when you have already see it.
I don’t even know why I don’t close the trade at least when it reverses to my entry level. Because I always hope the trade would turn around but end up not.
The fact is that, it is always hard for me to just take a trade or close it. Something always tells me to wait, and the results are never good.
Why is it always hard for me to make a quick decision every time I am in a trade?” The truth is, most of the traders face the same problem like him.
You realise, the sole cause of his problem is emotional trading.
Effects of Emotional Trading.
When it comes to trading, we should be able to control our emotions to make clear and objective decisions to succeed. Fear, greed, overconfidence, regret, disappointments cause procrastination to trade.
At this level, the level of pain is high. You cannot make any objective decisions.
This pain blocks your ability to interpret what the market is telling you at the moment because you think it’s not enough. That’s why you feel you need to do an extra analysis even when your setup shows all confirmation indicators. Or wait may be wait for a retest.
In the end you end up missing out or try to catch up with it. Jump into it late. As soon as you do that, it retests. Either it hits your stop loss and continues to your prediction or it makes a big retrace and you jump out again but this time with a big loss.
Why, because you are trading with hasty decisions. It’s the emotions driving you.
We are humans, we have emotions, something we can’t get rid of. Never the less, it is very important to learn how to handle them so that they don’t become an obstacle to your trading.
Some of the indicators/signals for procrastination to trade
- If you find yourself hesitate to take trade when your set up has confirmed. For instance, you tell yourself to wait for one more candlestick to close.
- You start to doubt your setup confirmation indicators. Therefore, you try to do an extra analysis even when your setup has confirmed.
- You start to look for extra confirmation evidence that are not included on your trading system.
- If you find yourself staying long in a wrong trade even when it has given all indicators that it has failed hoping for a retest.
- If you are always closing your trades with very large losses.
- Also, in case it is always difficult for you to cut losses, then it’s an indication for procrastination to trade.
- You hesitate to take good trades or sometimes miss out because the past trade was wrong
- Last but not least, you always let your winning trades turn into a loser.
Avoid procrastination to trade and improve decision making
Procrastination to trade may lead to missing very good opportunities in the market, losing money and also making hasty decision.
All this is not good for a trader who wants to profit from trading.
As a trader, you must be able to learn and master how to keep your emotions intact every time you are to act or make any decisions to trade.
Procrastination to trade is an indication that you have no confidence in whatever you are doing. You feel what you know or have is not enough for you to take a decision or act.
Start with yourself, study your actions and find out the reasons for your behaviour.
Align your mind with your expectations so as to allow yourself to perceive all the information the market is giving at the moment.
To achieve this, you must first learn to eliminate the emotional risk.
The five-fundamental truth about the market; Trading in the zone, Mark Douglas;
- ” Anything can happen in the market
- You don’t need to know what is going to happen next in order to make money
- There is a random distribution between wins and losses for any given set of variables that define an edge.
- An edge is nothing more than an indication of a higher probability of one thing happening over another.
- Every moment in the market is unique.”
If you can understand the above, you won’t find it hard to act according to your rules and make decision objectively.
Simply follow your trading rules, always predetermine your risk to reward ratio and learn to accept losses.
Key Points
- Remember, trading emotions whether positive or negative highly influence the next decisions you make to trade.
- Emotions will always be part of you and they actually define you. It is not something you can get rid of completely.
- Since trading psychology is a very important aspect when it come to Forex trading, you have to find a way on how to control your emotions to succeed.
- Procrastination to trade is as a result of emotional trading. This simply means, if you can handle the emotion, you can avoid the procrastination to trade.