Why Many Successful Forex Traders Fall Into the Greed Trap

Why Many Successful Forex Traders Fall Into the Greed Trap

I’ve worked with this person for years, and I’ve seen his trades fail on numerous occasions, because he puts in orders when there’s no fundamental information (he has no fundamental information because his transactions are not final). Most of the trades he takes, are of the greedy sort. This isn’t how to take advantage of what is effectively the best casino bonus you can redeem, if we could equate the markets to something like online betting platforms.

For example, he would say, “I am just going to buy all these USD/GBP pairs” and he would place lots of buy orders (buying, selling, etc.) at some minimum or maximum exchange rate. He would get the orders in and place the orders for the specific number of dollars or pounds. Then after he has sent out his order, all he would be looking for would be confirmation of that order.

For a short time he would get the confirmation (or sometimes a “yes,” which is also nice, but to which the trader would say, “Okay… That’s the last confirmation, what else can I do?”). And after that he would get another order to send to get that much more money (or at least a confirmation of the fact that he sent the first one, which he might not have even done), but he would be looking for yet another confirmation. If the order hadn’t gone through or wasn’t accepted right away (maybe the exchange didn’t provide such a high volume of orders for this particular currency pair) then he would be furious, because his expectation had not been fulfilled.

Of course the trader (I’m still talking about this person, who is an avid forex trader) would find ways to come up with a reason for that “no.” Maybe his “barter contract” wasn’t enough money, or he could have placed the order sooner, or he could have used a “derivative,” which wasn’t quite as risky (yet).

That’s exactly what happens when one gets greedy. One doesn’t put in the correct amount of money into a forex market, in order to be protected against the risk, but one puts in a very large amount in order to come up with the right amount of money, and then that whole “payment transaction” is denied, and the one who placed that large amount (of which there was only one amount to be paid, and they were not even close to it, as the profit was actually closer to zero than to real money).

The whole “money trail” that goes into the decision to put the money in the first place, just fell apart. That’s all there was, a situation where greed took over, and it would take an element of stupidity to put in a bunch of dollars, when the broker had to check to see if he put in enough money, to be covered by the exchange (at least that was the case until the advent of bank forex accounts).

That’s basically how the worst traders fall into the greed trap, in my opinion. It takes a lot of stupid to put in a bunch of dollars, when the brokerage should have said, “Yes, you’ve made that much money, we will cover that much of your losses” (and even more of a stupid to try to do something risky or risky-looking, in the end coming up with a situation of having made even more of a loss than before).

by Bobby

Causing waves and making moves, there's no one in the gambling game that compares. From high stakes tables to lucrative online wins. Bobby is the best of the best and has carved a successful career in professional gambling.

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