In Forex trading, for all those who have traded forex for quite a while -Will know that successful forex trading is actually mainly about mastering trading psychology.
Or should i say, to be successful in forex trading. You have to master trading psychology.If successful forex trading is segregated into percentages. 100% as full score.
I will rate trading psychology + Money management as 90%
8% as Exits
2% as Entries
Therefore you can see how important it is to take trading psychology seriously as a topic itself.However, strangely enough, this is the topic that most traders shun away from.
And sure enough, these are not the traders that make consistent money from forex trading.Trading psychology in forex is actually about understand yourself.
Understanding your risk appetite, Developing your discipline
Whether you are a risk taker – taking every trade you see. Or every trade which you think will go your way.
Or you are a conservative player – Over analyzing a trade, even when a good opportunity arrives. You will take too long to consider and eventually give up a good trade.
To be consistently successful in forex trading.It is about staying discipline and only take trades that your system agrees with. or proven to work.
It is about NOT taking trades that is not in your system.It is about NOT missing trades that are in your system.It is about patience – waiting for your trade setups to come.And Not take trades in the meanwhile.
It is a mental struggle with yourself. Managing your beliefs, your discipline, your emotions
.Example A): You strongly feel that this trade will go in this direction, however, the trade is not in your system. Can you control yourself not to take the trade even though you know it will end up a winner?
Example B): You know that this trade is a sure winner, and it is in your system. You are so sure that this is a winner that you want to increase your position size to way beyond your system suggest. Example you are trading a 3% per trade. Because you feel that this is a sure winner, there is no harm placing 9% on that trade. Or 3 of the same trades.
Can you control yourself not to increase your position size even though you know it will end up a winner yet again?
Remember. Successful Trading is all about consistency. If you allow the above example a or example b to happen. You are not being consistent in your trade.Therefore your trade will have random variables which will not make you a Consistent Winner.If you go against your trading rules once, you will go against it the 2nd time and the 3rd time.If the first time you went against your trading rules and it became a winner. You will most likely break the trading rules the next time.
This is the main reason why most traders fail in trading.
Ask yourself, will a professional trader do the above? No. The reason is because the professional trader treat forex trading as his business.Therefore, it does not matter whether he miss a “Sure Win” trade. Because at the end of the day, he knows that he will end up a winner with his proven to work trading system.
When the trader keeps practicing the above values, and proper trading psychology. In the initial weeks, it will be a mental struggle as it is not what you used to do.But when you keep doing the right thing, this new beliefs will become part of you and you not longer feel it is a hassle nor do you feel that you are making any effort.
As it has already become part of you.Remember trading psychology and start practicing it today.
And when combine with Asia Forex Mentor Price Action Forex Trading System. Success is knocking at your door.
See you in our group.
Next Advanced Article: forex trading psychology – conquering your emotions (part 1)