Forex psychology

With limited exposure and experiences most traders end up paying large amount of money towards learning forex trading. Through this post I am going to reveal the basic reasons that lead to failure for Forex traders. And that it certainly does not hold true that they cannot beat the forex market.

Forex Trading Psychology Articles | DailyForex

The fact is that they cannot defeat themselves. This is not the first time we are talking about this matter. The first psychological mistake that most new and semi experienced Forex traders commit is to follow the trend blindly without using common sense and logic.

Things like an economical data published, some kind of breaking news aired on radio or T. V, 5 minutes chart reflecting a breakout and many such other things will trigger most forex traders to rush and be first to enter the market. But as a forex trader you should remember that you have to follow the trend to trade, not be the first to enter the market after any data or news published.

Forex Trading Psychology: The Four Demons of Trading Psychology

It means first you have to wait for the market to start a trend and then you enter and follow it. For example if as a trader you enter the trade based on first report released. Not waiting for other similar reports to come out. It often happens that after a few economic data are being released one following the other.

What most forex traders do is they do not wait for same figures to be released by more than a few agencies. Whereas they have to wait for the market real reaction. Sometimes they go the opposite way which is what we are seeing more these days.

Another example of it is that there are also traders who trade by keeping a close watch on the chart, and will enter market when the charts show extreme movement. These traders are again in a state of frenzy and do not take time to understand what the forces are for such a movement. And when they realize this for most traders is a gone game and too late to realize that it was a false alarm because they are already in the losing position.

If you are a technical trader like us, then you have to wait for the price to make a strong trade setup which is most probably made by a strong news. Then comes the 2nd reason which is greed. Forex trader is generally seen to be driven by greed of making high and consistent profits with each trade.

If this was not true the currency market would not have been the largest market in the world. But what makes most forex traders lose at the end is their greediness. Majority of these guys are on their way to earning decent returns on their investments, but again greed takes over and most forex traders start gambling at some stage as they are not satisfied with a reasonable profit.

What they start aiming at is at least a double or triple. I mean they like to double to triple their accounts every month. This results in heavy losses for the traders. But they are never so quick on the uptake when it comes to finding what it takes to be a winner, learning those skills and learning from mistakes of other traders. Had they been a more sincere and patient lot, success would come much easier. Those who make millions through trading, have some other conditions, and, if you like to reach the level they are, you have to create the same condition for yourself too: Sometimes they make strong trends while you are out.

These are all part of the game and you have to get used to it.

Greed tells you that you have to make money through any of market movements. But nobody can do that. You can get in only when the market forms a strong trade setup that you can see it on time, otherwise you should be out. This is something that only a novice trader who has no experience does.

They professionally and patiently wait for the markets big participants to take a strong decision and choose a direction that move the price at least for the next several weeks or months. This is how it works. Not all the positions are going to make money for you. Your stop loss will get hit sometimes.

This is also part of the game. It is the market that decides after all and you should be happy with it.

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Just make sure to record your positions and re-analyze to learn why you made profit or you lost. Sometimes you lose because of your own mistake in choosing the setup. In both cases, you should learn something. So, record your positions and analyze the charts after losing or winning: Importance of Forex Trading Journal for Forex Traders.

Unless you accept your mistake and the reasons behind it, you will not be able to deal with it and unless that happens, the profits will not roll in. You can easily keep on trading and recover the loss.

However, when no stop loss is set, or when the stop loss is too wide and the position is too big, then the loss will be too big too: My Stop Loss Was Triggered! This is a really important article for me. Does mainstream media manipulate public with their predictions about movements of certain currency pairs or commodities, and how big is their influence on price movements?

I wish that person well in their trade, whomever they may be. That money was never mine to have anyway. Wow, priceless information brother Chris thank you for sharing such insider information, truly gives us an edge and proper min set to succeed.

I have finished these days my second traders phase and it is six months of trading on real account. I followed your recommendations, six months on demo account, and then if you are consistently profitable , six months on a small real account. After first profitable stage, I was ready for next step, and it was a real account.

I traded six months on real account, and I was profitable after every month. I will share my statement with you now. You can see it in chart below. I have moved only numbers from my chart,but it is small account. Really glad to see your result.

Keep on repeating what you have been doing with your demo account. Leave a Reply Cancel reply:. Your email address will not be published. Notify me of followup comments via e-mail. You can also subscribe without commenting. Get Our New E-Books For Free.

The Psychological Mistakes that Currency Traders Make By: Forex Trading Psychology Last Updated: Enter Your Email Address and Check Your Inbox: LEARN A PROVEN BUSINESS PLAN. February 9, at February 9, at 4: February 9, at 2: February 13, at 1: February 13, at February 19, at Leave a Reply Cancel reply: The Easiest Way to Get Rich Fast.

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