Psychology of Forex Trading

what most traders fear is loss, which is inevitable while trading. so why not, let go of it and focus on how to increase the accuracy of trades.

whitero posted:
what most traders fear is loss, which is inevitable while trading. so why not, let go of it and focus on how to increase the accuracy of trades.

It’s because they opened their live trading too early! When you have 5K-6K trades experience, then you must know your strength and weakness of trading.

AmDiab posted:

whitero posted:
what most traders fear is loss, which is inevitable while trading. so why not, let go of it and focus on how to increase the accuracy of trades.

It’s because they opened their live trading too early! When you have 5K-6K trades experience, then you must know your strength and weakness of trading.

true, when i started i was backed by 6 months of demo trading and a set a side cash, which i had no fear of losing.

Traders, especially those who have already felt the taste of victory and the severity of loss, know that the market can exert psychological pressure on the trader. The market forces the trader to be in an imbalance.
The trader must find an opportunity not to lose balance between mind and emotions.

The market can be considered as a destabilizing factor.
Trader - as an equilibrium system.
Trading psychology - as a way to find vulnerabilities in balance and prevent them.

- from my blog post

This is why, I don’t allowing my balance & equity on my trading chart; because I feel extra pressure when I see my balance increasing or decreasing because of my live running trades!

The first thing one can do is make a list of trading rules which will guide you how to trade,when you should enter or exit and how much you should risk. Just having rules isn’t enough write them down on a trading journal. Now visualize yourself following your rules. For instance,imagine that you have an open position,now think of all the different price action scenarios you may encounter and imagine how you would adjust your position in these situations. At the end of the day,review your trading. Grade yourself and make it a point to work on your weaknesses. By reviewing your trading,you will be able to see whether your rules are effective or not.

Improving your forex trading psychology will require patience and lots of practice. Never lose hope .Read a lot of articles and books on trading. Learn to be disciplined and avoid emotional trading. Only when your trading psychology will improve you will be able to generate more profits.

The human nature by itself is hard to battle. We are born with DNA to fight or flight, to fear loses more than appreciate victory. This is obvious for the people when living in the caves, even helps today, but in trading it can only kill performance. The biggest obstacle when we fight the markets is our nature to pray for our losers and to cut our wining trades quickly - exactly the opposite to what every wining trader should do - cut losses quickly and let profits run.

To overcome these obstacles there are two approaches, each with their problems. First is to use mechanical system and follow the rules strictly, second is to have only SL/TP rules and select the entries manually, but both approaches are kind of rigid and are suboptimal. Unfortunately to trade totally discretionary and profitably is possible only for highly skilled traders.

quantumforex posted:
The human nature by itself is hard to battle. We are born with DNA to fight or flight, to fear loses more than appreciate victory. This is obvious for the people when living in the caves, even helps today, but in trading it can only kill performance. The biggest obstacle when we fight the markets is our nature to pray for our losers and to cut our wining trades quickly - exactly the opposite to what every wining trader should do - cut losses quickly and let profits run.

To overcome these obstacles there are two approaches, each with their problems. First is to use mechanical system and follow the rules strictly, second is to have only SL/TP rules and select the entries manually, but both approaches are kind of rigid and are suboptimal. Unfortunately to trade totally discretionary and profitably is possible only for highly skilled traders.

I think, in this case: meditation can play a very big role! I always do meditation before opening my trading chart & it helps me a lot!

In Fx trading, learning is not easy despite of having too many sources including pips school, learning sometimes boning and usually new traders get tempts to start trading without enough knowledge and become fascinated with the way of trading live which may cause laziness and trapped by wishful thinking get rich quickly scheme

People who want to 'get rich quick' are lazy. FACT. They will always fail because they do not want to put the effort in

BBBLack posted:
People who want to 'get rich quick' are lazy. FACT. They will always fail because they do not want to put the effort in

agreed, there is no way in world you 'get rich quick' except if you won any lottery :D

learn hard, demo hard, practice hard, - play hard. Without hard work there is nothing

Demo account is best learning environment for new trader. Risk free place to experiment and learn. I am trying to learn but it is time consuming and so much information. It is difficult to know what to read and what to ignore

The best practice to successfully and easily trade forex is to keep your trading system as simple as possible and use predetermined or preset entry exit plans before trade entry so that you don't have to interfere with trades once the trades are open.

You can plan as much as your want before trade entry, but NOT once the trades are open. Just leave the trades and let them hit your profit target or stoploss. This kind of approach will fast forward the learning process in forex trading by avoid mistakes due to emotions.

But every few hours if you look into the charts and the open trades and adjust the trades etc, there is a high chance of failure than success even after years of practice in demo or live.

Never be overconfident and don’t become egoistic while accepting your mistakes, rather learn form them. Practice hard and keep researching new strategies.

But at the same time, a trader should not be self-doubt and afraid of mistakes. Also, sometimes it’s important to stay and stick to your strategy.

Before large investments we generally open a demo account in a broker to see the performance how it works. But I have seen, after large investments brokers attitude changes sometimes that is not available in micro accounts.

If you have large investments then better to use ECN broker. A bucket shop broker will screw you around and either open / close trade late or will just not let you withdraw