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Trade
The psychology of Forex trading
Bad are You familiar with the markets, or are You already a seasoned veteran, You probably already know about the huge role of psychology in trading success.
Financial markets swell on the hopes and fears of its participants, which often leads to such consequences in the market that no one could predict. Indeed, one has only to try to do a little surgery to fully experience all the emotions that arise when placing their own money in the market.
Know yourself
The first thing that needs to be done to understand psychological aspects of trading, is to understand the reasons that cause You to go to the market. You need to identify Your "shopping" personality. What is Your personal "tolerability" of risk, and what You should do to ensure for yourself making the right trading decisions?
For example, if You find it difficult to tolerate large diurnal variations, you can try swing trading instead of intraday. If You think Your emotions make You too frequently change Your trading decisions, then You just have to consider the development of a trading system.
It is always possible to "discipline" Your thinking, hand in keeping a diary or journal detailing Your trading setup and Your emotions for each transaction. Continuously "overestimate" his diary to try to figure out where You "went the wrong way" and how to overcome their internal constraints.
Be more confident
Ed Seykota, one of the best traders of all time, famous statement that "everyone gets from the market what they want" - in General, this means that if You want to lose, You lose, and if You want to win, then You are bound to win. This assertion seems ridiculous and outrageously simplistic but Seykota touched by the fact that people often pull a market of the excess psychological baggage and personal conflicts, and it is capable of (on a subconscious level) to "derail" the correct trading decisions.Therefore, the best traders tend to be down to earth, and keep in mind only positive expectations from each transaction.
To stay confident, always remind yourself why You trade, and don't forget to keep in mind Your goals. Be sure to realize himself as a man, reach those goals, and maintain at a high level for such a positive internal dialogue as often as I can.
In addition, to develop clear-cut rules that may help to separate Your emotional "I" from the market and try to surround yourself with other positive people with similar goals. Try to do regular exercise, mental and physical, and make sure that you give yourself a break when tired or just not able to get pleasure from the trade. Many traders are trying to deal with such periods of trading fatigue after weeks of hard getting cash on the market.
Overcome your emotions
One of the reasons why Forex trading is so psychologically complex, lies in the fact that it requires You to act contrary to Your natural human emotions. For example, it seems much more natural to buy something that appreciates in value, is reduced. However, in Forex trading to make money is based on complete opposites – that is, cheap buy and sell on the rise.
Similarly, when You open a trade and lose on it money, the natural human reaction is waiting in the hope that the price eventually will turn in Your direction. Of course, such greed, so often leads to large losses and the best response in this situation will be timely reducing Your losses as much as possible. Similar problems arise when You have discovered a winning position, but want to make a profit too quickly out of fear to lose her, too late, already out of a desire to grab a piece of fatter.
Such a contrast between natural instinct and the psychology needed to win over the market element, actually provides You with additional features, it is not strange to talk about it. Mindful of these limitations the successful trader can snatch those moments when the market is excited by panic or when he is overwhelmed with euphoria. And it is in these moments often make the best agreement.
Manage the risk
One of the key elements in overcoming the power of Your emotions is the effective management of risk. Since the process involved money, which, understandably, can have a huge impact on Your emotions, then You should trade on that level, which is quite comfortable for You and fits Your personality. Trading in very large volumes, significantly increases Your emotional response, and that means making the right and objective trade decisions becomes virtually impossible.Similarly, a very small volume of transactions can easily lead to complacency, and further to the limit is exceeded, the account. To successfully manage risk, You have to invent or choose a strategy that works for You, and then stick to it. Since all You need is only perform the operation, and focus only on that.
Never stop learning
One of the main aspects of trading is that financial markets are continuously evolving. This means that trading often becomes a way of vseporodny personalities of traders, however, great pleasure to those who are involved in this process directly involved.
Every day brings us a new political and economic developments, and hence new opportunities for profit - why it is such a degree of complexity that never gets old. The reason for such categorical statement that a successful trader is one who is continuously improved.
To achieve success, it is important to learn about new technologies and use them to follow current events, new strategies and theories. Of course, you need to stay humble, since the market is always enough dexterity and strength in order to destroy the reputation and capital those traders who are too arrogant towards him.
Arrogance goes hand in hand with complacency. Thus, it makes sense to approach the markets, guided by the optimistic, but very careful thinking.
And, in the end, it is important to remember another feature needed to win the trade perseverance.
Indeed, the way to wealth is littered with the bodies of countless traders who tried to win and failed. Successful traders act in different guises and use many different methods. However, they have one trait common to all successful people – they never give up.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 303
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