Fear, greed, and hope are always controlling the investors. As investors have to process a large amount of data in the financial market, it becomes tough for them to control their emotions. They become psychologically unstable and take trades without following the standard protocols. In fact, the new investors don’t even know they are taking trades with emotions. They even defy the fact they are not qualified to trade financial instruments.
Having the qualification and well-balanced trading method is a must to start investing in the financial market. Even after having a deep understanding of this business, people find it hard to manage their emotions. They become emotional and break the rules and blame the market.
So, is there any way by which we can control the risk? Is it possible to execute a trade without having any emotional attachment? Luckily, we can offer you the perfect solution. The advanced risk management bots are getting popular as it helps the traders to manage their emotions. Let’s find out how exactly such bots help to control the emotion at trading.
Buying the bottom and selling the tops is the sign that you are taking emotional trades. Taking emotional trades is nothing but making yourself vulnerable to the big players of the market. The large institution, banks, and big players always make money by taking advantage of the greedy approach of the rookie traders. To solve this problem, you have to stick to the trend execution process only.
The advanced risk management bots can easily determine the trade and disable the buying or the selling option from the platform. For instance, if the trend in the EURUSD pair is bullish, the bot will disable the sell option from the platform.
Even though the traders will die to short the asset but they won’t be able to open a sell order as bots are programmed not allow the users to take any trade against the trend. Though you might miss some profit due to such restrictions, in the long run, the bot is going to save a huge amount of money.
Disabling the insane big volume trade execution
Increasing the lot size to recover the loss is a very common approach at trading. If you want to become good at trading, you must learn to determine the optimized lot size. The lot size greatly varies as your account balance changes right after closing a trade. In the case of having some running trades, you need to analyze the floating loss or profit to find the optimized volume for trading. Though all these things can be done via manual calculation it is tough to check the emotions when you have a series of winners or losers.
The bots will simply analyze the equity of the trading account and determine the maximum lot size for each trade. So, how does the bot know how much we are risking for a particular trade? The program analyzes the stop loss level and determines the optimum lot.
So, if you try to trick the bot by keeping the SL place blank, the trade is not going to be executed. It’s more like forcing you to trade with low-risk exposure.
Closing the trades too early
People are good at finding the perfect position. However, they close the profitable trades too early with a fear that they will lose all the profits. But for the losing trades, they wait with great hope until the trade hits the potential stop loss. But this problem can be solved with the help of risk management bots. Until the trade reaches its initial goal, the traders will not be able to close the trade. The closing option will be enabled by the bots when the trade reaches the goal of a 1:2 risk to reward ratio. With this simple option, you can ensure a standard rule is applied to your trading system.
In some cases, the traders understand the trade is going to hit the SL but they might feel the urge to close the trade with a loss. As the bot is not programmed to close any trade with a negative risk to reward ratio, you can ask the programmers to enable the feature of closing a trade if the floating result is negative.
Fear, greed, and hope might be your greatest enemy at trading but you now know how to beat the emotions at trading. Before you use an advanced risk management bot, learn its use properly in the demo account. Once you feel comfortable using it to trade the real market. You will definitely feel that you are taking trades in a more organized way.