Forex trading psychology
Whatever the trader does, the trading psychology always influences his actions. Subconsciously or consciously, every market participant is afraid of something.
Forex trading psychology - trader's prejudices
Whatever the trader does, the trading psychology always influences his actions. Subconsciously or consciously, every market participant is afraid of something. Such emotions are experienced by any person who makes deals on the exchange. Psychology of trading on the Forex market. However, the winner is the one who can manage himself even in tense situations.
The most frequently made mistakes and trading psychology
Beginners and even experienced traders can do some wrong things with strong emotions:
Do not put a stop-loss or constantly push it back, only aggravating the situation. The reason is that it is difficult for a person to admit his or her wrong and close the unprofitable position. He hopes that the drawdown will be able to survive, but in the end only increases the size of their own losses, although he could cut them off at the initial stage, and the saved money to spend at the entrance to a profitable position.
Close the deal at a low profit. Explanation in the context of trading psychology - a person tends to take at least a few points more than the initial value, than to exit the position with a loss. Instead, we can recommend the use of a trailing stop or manual movement of an order that limits losses. Then the position will be closed by the stop-loss, but by that time it will have been in the profitable zone for a long time.
Enter the market before the final signal formation on the chart. It seems to the trader: if we wait for the ideal moment, it will be too late to enter the game. However, premature entry only leads to losses due to chaotic actions. This is how the trader's psychology works. But this fact can be changed if we observe discipline and wait for the confirmation of the indicator signals.
To see missed opportunities in every market movement. But no trading strategy will allow earning absolutely on all local trends. You need to choose your own system, and work on it. The market will have enough opportunities for you to earn.
Excessive Stop Loss. It seems to the trader that if he places a pending order according to the recommendations of a trading strategy, it will be a close distance, and it will just beat him out of the market. However, experts do not in vain specify a fixed distance in points: this parameter has been tested many times. If the stop-loss is simply overestimated, it is tantamount to agree to the loss of more money than a possible minimum.
How to find a way out of repeated situations? The Psychology of Forex Trading
First, you must learn to ignore your own emotions. You must think rationally. You should enter the market if the conditions are met for that. When due to the deposit drawdown the ability to adequately analyze the situation is lost - remember that the trading result consists of a certain set of deals. Among them there are also profitable ones. This is called for by the psychology of trading in the Forex market of a successful trader.
Trading efficiency largely depends on a trader's mood for work. To be positive, you need to have a good sleep, physical activity, a balanced diet, rest enough time, have a hobby to switch attention and relax.
To make a stable profit, you need to test it on a demo account for a long time after finding a trading strategy. It is important to understand every nuance, and only then apply the algorithm of work on a real account. Choose a lot of size so that the drawdown or profit on it do not cause too much excitement. Psychology of Forex trading. You should listen to your feelings. It may happen that in the context of trading psychology, the tools and methods used by you will cause some discomfort. This is a sign that they need to be changed. For example, someone is comfortable working with a trading system, in which trades are held open for several days, while you - prefer the activity on M5-M15, with the closing of deals for a couple of hours.