When we start trading forex, besides the risk factor, world events, strategies, software performance, cash available and knowledge acquired, psychology plays a big and important role in currency trading. This is probably the most important part of trading that should be mastered before doing any trading.
There are several psychological factors that influence foreign exchange trading:
- Losses Impact
Every trader wants to make money, of course, but the impact of a loss is what differentiates a successful trader from someone just starting out. It is difficult to take a loss and the new trader will take it as a failure, a mistake he/she made. A successful trader will take it as a cost of trading, not as a personal failure. He/she knows that the volatility of the market makes it impossible to have 100% successful trades, so he/she takes it as it is: part of the trading activity.
- Trends and Historical Data
Having the trends and the historical data gives a great piece of mind to the trader. It makes him/her feel confidence in what he/she does and in the decisions he/she makes. Having this information and this confidence makes the impact of a loss less dramatic.
- Detachment
Being mentally and emotionally detached from the market gives the trader great control, as ironic as it sounds. He/she does not make impulsive decisions and neither reacts to the market. Leaving behind the fear, the anxiety, the greed, and the ego, gives the trader the right attitude to trade successfully.
- Love
A successful trader loves what he/she does. He/she is not counting the pennies made or lost during the day or during the month. This trader loves studying the markets, applying strategies, talking to other traders and comparing notes, and so on. Without even realizing it, money follows. This trader does not know how much he/she makes, but it is a lot, that is for sure.
Psychology plays a big role in currency trading. The trick is to use it to your advantage in order to make the most of your trading. Not mastering any of the factors described above will keep you from achieving all the success you can achieve.
And remember: the right attitude will always be your best ally.
Copyright by Lanval, Corp. All rights reserved worldwide.
There are several psychological factors that influence foreign exchange trading:
- Losses Impact
Every trader wants to make money, of course, but the impact of a loss is what differentiates a successful trader from someone just starting out. It is difficult to take a loss and the new trader will take it as a failure, a mistake he/she made. A successful trader will take it as a cost of trading, not as a personal failure. He/she knows that the volatility of the market makes it impossible to have 100% successful trades, so he/she takes it as it is: part of the trading activity.
- Trends and Historical Data
Having the trends and the historical data gives a great piece of mind to the trader. It makes him/her feel confidence in what he/she does and in the decisions he/she makes. Having this information and this confidence makes the impact of a loss less dramatic.
- Detachment
Being mentally and emotionally detached from the market gives the trader great control, as ironic as it sounds. He/she does not make impulsive decisions and neither reacts to the market. Leaving behind the fear, the anxiety, the greed, and the ego, gives the trader the right attitude to trade successfully.
- Love
A successful trader loves what he/she does. He/she is not counting the pennies made or lost during the day or during the month. This trader loves studying the markets, applying strategies, talking to other traders and comparing notes, and so on. Without even realizing it, money follows. This trader does not know how much he/she makes, but it is a lot, that is for sure.
Psychology plays a big role in currency trading. The trick is to use it to your advantage in order to make the most of your trading. Not mastering any of the factors described above will keep you from achieving all the success you can achieve.
And remember: the right attitude will always be your best ally.
Copyright by Lanval, Corp. All rights reserved worldwide.
About the Author:
Join the Successful Trading Club and receive information, tips, strategies, resources, and all the information you need for a profitable trading. To know how several forex risks play an important role in currency trading, visit foreignexchangecenter.com.
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