A lot of people lose money in Forex Trading because they fail to master their emotions. Many books have been written on tips for better trading, but even so, no two people using the same trading methods come up with the same results. How come? Yet every trader has at some point attended a workshop, courses and mentorship programs aimed at enabling traders make more money. But despite all these, very few people succeed. The question is, why?
Forex Trading Psychology
Simple as it sounds, Forex trading psychology is a crucial aspect of successful trading. Trading psychology has to do with the emotional state of mind when trading. Most times, people fail in Forex trading because of emotions and trading anxiety that can result in uncalculated trading. The consequence normally is poor returns! To trade efficiently, you have to take charge of your emotions, eliminate any trading anxiety, be confident and ensure you avoid silly trading mistakes that can cost you money.
The moment you cannot control your emotions, irrational decision making sets in, and even though you might be an experienced trader, you lose money in situations you would have fared better. Psychology can mean the difference between profits and losses. Your state of mind is crucial in Forex Trading, as you make decisions on a sixth sense and fast.
But how do you go about controlling your mind and taking charge of successful trading for maximum profits? Here are some tips to start you off:
•You can begin by making use of stop loss and taking profit prices to reign in your trade. What this does is give you the opportunity to place the trade and halt any deals with it. The overall effect is experience, for the more you deal with a trade, the more it becomes engrained in your mind.
•Once you have placed a stop loss, walk away. Do not wait to see how the trade turns out. Most traders place a stop loss and then wait around to see what happens. It beats the whole point of stop loss in the first place. Being there means you are planning to interfere with trading midway, and you don’t want to do that. So walk away!
•Another tactic is to employ low leverages. Super high leverages may seem attractive because of the higher profits, but be careful because they carry the potential for heavy losses as well. Plus if in such a situation, the uncertainty that comes with it can lead to trading anxiety, and subsequently poor trading decisions. So keep the leverages low until such a time when you are confident you have the psychological control necessary for high leverages.
•Make use of proven methods of trading, those you are sure about. There is nothing as dangerous in trading as using a method you are not sure of. Proper and efficient trading methods help you relax and stay a bit calmer, as the uncertainty is somehow eradicated.
Whatever you do, watch out for your psychology. It works to your advantage if you can work on your mental fitness and stay in control.
Forex Trading Psychology is one of the MOST IMPORTANT thing to master when it comes to forex trading. This is something which we teach in our AFM Winning Forex Course
See you on the other side my friend,
Asia Forex Mentor
Ezekiel Chew
Asia #1 Forex Mentor
www.asiaforexmentor.com
Next Advanced Article: Forex trading psychology – the main reason why forex traders fail
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