Forex Market – The Psychology of Trading In Forex
The objective of any Forex trader is to be free, live anywhere in the world, be free from schedules, and be their own boss.
That’s the life a successful Forex trader will find. But no one should think it’s easy. Many aspire for that kind of life, but few achieve it. Any person with Forex platforms on their computer screens can see millions of dollars fluctuating before their eyes, within their grasp, and feel that it is the moment to establish their position. They do it and they lose it. They try it again, and lose yet again. Forex traders lose because the “game” is difficult, and because a strong dose of knowledge, patience, and discipline is needed.
As important as it is to have knowledge, or maybe even more important is to have one’s head well-furnished to avoid impulsive actions. It’s very tempting when, seeing a pair of currencies keep rising without stop for the last hour and you think, “Well, why won’t it keep rising an hour and five minutes?” Then you invest a good sum, probably more than your banking management lets you, and well, you already imagine the result, right? It’s then that the tendency changes and you say, “Bad luck.” Perhaps it was or perhaps it wasn’t, and is the result of your impulsivity in a bad moment.
A lack of capacity for self-control can easily take you to the lack of management of your money. Psychology as a science is very important in trading in Forex and while successful traders recognize that, losing traders don’t. What a coincidence, right?
Good psychology and good trading have an important principle in common. Both concentrate on reality, in view of the way the world is shaped. To have a happy life, a person should live with open eyes, recognize the real changes and tendencies, and not waste time or energy weeping or hopeful attitude.
We are all in a permanent search for emotions that bring meaning to our lives and keeping in mind that work is getting more routinely every time, we search for activities in which qualities like individual distinction, discernment, adventure, and emotion play large roles. All of these are present in Forex trading.
A great risk is to focus your trading in an emotional way. Emotional trading has disastrous results for your bank account. To find success in the Forex market you must practice “conservative” management of your money. Translated into sports language, you should play defense.