Many traders-beginners are sure, that success on Forex depends mainly on a trading strategy and risk management, and don't think about the psychological aspect of the trading. However, emotions may affect trading process very much. The psychology of the Forex trading really exists and it is one of the things that differs a successful trader from a losing one.
2. Most of people think that the success on Forex depends mainly on
a trading strategy and risk management, dismissing the
psychological aspect. However, it influences the final trader’s
mindset and the attitude to the Forex market. It is really important
to develop a trading plan, but it is just a piece of the pie. You need
to know how to use your trading system correctly and how to react
to the market behavior without panic. The psychology of the Forex
trading really exists and it is one of the things that differs a
successful trader from a losing one.
4. You must be heard that most newbies blow
their accounts while trading on Forex. Such
people often say that Forex is a scam. But their
main problem is the wrong attitude to the Forex
trading itself. Most of beginners suffer from
their own unrealistic expectations. They expect
that the Forex trading will make them rich and
they will make $10000 from $100. However,
even experienced traders don’t usually make
more than 10-15% of the initial depo in a year.
5. The cause for losing money is the
idea that a trader needs to make
money and achieve success.
Such the emotional state makes
them open new deals nearly every
minute, without any analysis, and
without following the trading plan.
Remember, that you don’t need to
open deals because you feel you
have to. Do it only after you get
reliable signals.
7. Most traders who have just began their
Forex journey want to make more money
and wait until their trade will go on further
and bring them a great win. However, it
rarely leads to successful trading as trends
may be volatile and can change their movements
very often. Risking too many lots per one trade is the
next mistake that traders make due to greed. Expert
say, that it is always better to risk not more than 2% of
your capital. It helps to control your greed and save
your funds in case of a losing trade.
Greed: the most common feeling
8. It is natural for people to feel fear while taking
the first steps into the Forex world. If you are
sure that there are signals for opening or
closing a deal, you would do it without
hesitation. This emotion can also come to you
after a losing trade, especially if you have lost
more money than you could afford. How to
manage such situations? Treat the market with
logic, always analyze its technical patterns and
make sure you don’t risk too much.
Fear of entering the market and exiting from it
9. Traders often want revenge when they were planning
that a deal would work out, but this didn’t happen. The
best advice here will be to remember that Forex is an
unpredictable market and there are no sure ways to
win on it. Once you start, you should keep in mind that
your deal may reach the stop loss level even if you
planned it well. This happens and it is normal for the
market you work with. It is in its nature. Better turn your
trading terminal off, think what was wrong in your
trading, develop your trading system, read an article
about the trading psychology, drink some tea. And just
after you have calmed down, get back to work.
The wish for revenge
10. No doubt, many traders enjoy this feeling.
Nevertheless, this can cause certain
problems too. People may become
over-confident and risky because of the
euphoria. Of course, you can wish to enter
the market just after you have closed a
couple of successful deals, but there are no
guarantees that it will work the same way.
Be cautious and open deals only after
finding strong signals for that.
Feeling euphoria after closing winning trades
12. The best way to become a successful trader who will earn money on Forex for sure,
try to create the proper understanding of psychology. It may be hard and you will need
to take efforts to learn to control your emotions. The good news is that it’s not so difficult as
it may seem for the first time. Just accept certain facts about the Forex market as inevitable
normal things. You may keep in mind that trading can be profitable but not to those people
who go ‘all in’ and risk a lot.
The next most important point is mastering a trading strategy of your choice. If
you understand how the market works, when it is better to enter it and exit from it, you will
be more confident and enter it without fear.
Find out your risks for all the trades, another way your emotions will come and ruin
your plans. Do it for every deal, and never place any of them before calculating your
potential risks and profits. Forex is more about analysis and math, not the intuition.
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