Today we are going to be talking trade psychology, Having expertise and experience in forex market analysis or being well versed in the subject of forex generally is simply not enough when it comes to becoming a successful, profitable forex trader.

You may understand a plethora of tried and tested strategies and you may understand the most widely used technical indicators, but if you don’t learn to understand yourself you will have a hard time making money as a Forex trader and attaining those ever elusive financial freedom goals.

The most common skill set That is often overlooked in the trading world is the mastery of the self, every successful forex trader to some degree must become a master of his or her own emotions in order to implement their trading plan with a rigid emotionless sense of purpose. If intelligence and accumulated knowledge were the key to becoming successful, traders would be ten a penny by which I mean plentiful.

Intelligence is a factor not be diminished when it comes to trading, however if you can not keep your base emotions in check such as greed, fear and the euphoria or dismay experienced with those early wins and losses it can seriously be a detriment to your decision making abilities.

When we don’t keep our emotions in check it can reflect in our account balances as making decisions when feeling angry or depressed is likely to lead to poor decision making.

So how can we get a handle on our emotions? what is the key to being able to view our mindset with a pair of fresh eyes.

Experienced Forex traders know all to well the psychology of controlling emotions under stress. They know when to trade and when it’s time to step away for rest and re evaluation. Setting ourselves a list of guidelines when trading just as we do with our trading plans and adhering to those principles, can aid us in training the mind to behave as we want it to until it becomes second nature.

Here is an example of what this list may include…Rule number one Never trade out of greed!

Not placing a trade is the quickest way to not lose money! It’s pretty obvious but what I mean by this is trading when greed is at the wheel mentally speaking is a sure way to cause your self to enter a stressful and fearful state of mind as you are not trading based on proper analysis or in accordance with your plan and deep down your brain knows it.

Rule number two! Always be aware that forex trading is a Risk that is not guaranteed.

Experienced traders know that the uncertainty in the Forex market which is not to be confused with a lack of confidence, is a factor to be seriously considered.

No matter how sound your trading decisions are based on your analysis the market can always unexpectedly go against you and you should be ready to accept your predetermined loss as part and parcel of the profession, we all make sacrifices in one way or another no matter what we do professionally and financial loss is to be expected, how much loss is always down to you. Being mentally prepared for the worst possible outcome is what will harden you emotionally and establish you as seasoned trader in the long term. Thinking this way can reduce the impact of negative emotions and preparing for the worst is always better than hoping for the best.

Rule number 3! Never expect quick profits!

Really Ask yourself are you a gambler or a trader in the making? Do you want to flirt with the idea of becoming a professional or actually become one? This rule also encompasses greed emotionally speaking.

novice Forex traders Often make this error and look to make some quick money by placing trades with huge trading volume and lot sizes. obviously when you choose a huge lot size, you are also risking a huge amount of money over trading with strategy and risk reward in mind. They are blinded by potential profits over potential losses and break their banks quickly ignoring logic and common sense.

Experienced traders always follow a good risk management strategy and value slow consistent gains as highest priority as consistency is king.

Now just understanding these three important rules about Forex trading psychology can make a huge difference in your attitude awareness.

To summarise Taking regular breaks when you become too emotional and always being aware of the uncertainty in Forex trading is essential, practicing good risk management is also massively important and helps to keep your emotions out of the trading arena.

Let’s now talk about prevention.

The best way to not allow your emotions to cloud your logic is to have a plan and above all stick to your plan. By eliminating bad behavioural patterns we can prevent the consequences of those actions effecting us in the first place.

You should!

* Put together a effective trading plan and stick to the plan. Trading with good planning reduces risk and also prevents emotions affecting your performance. Self discipline is an integral part of trading.

* Set and forget your trades Just placing your trades and walking away is the best way to be, watching your trades constantly will not effect the outcome but only serve to cause you stress. We set our entries, take profits and stop losses for a reason and it’s not constantly watch and alter them.

* Always use tried and tested strategies. learning a pre existing strategy and back testing it will give you confidence in its potential and will allow you to obey its rules easier once you know its worth.

Mastering your emotions is the key to long term success. Now we know the value of keeping them out of the trading world we can begin to build the knowledge we have discussed today into our trading plan.

If you have ever previously wondered why 90% of Forex traders lose money and quit, then you now have the answer to that question.

Having a library of knowledge regarding forex trading and little to no understanding of trade psychology is a recipe for failure and if you did not know that prior to watching this video you have learned a considerably valuable lesson today.

Greed is psychologically speaking at the heart of all failure and consistent profits however small are paramount to psychological and financial success. Build a plan! Stick to the plan! And avoid situations that let your emotions rule in place of logical determination.

I hope you have found our discussion today informative ladies and gentlemen please sit back and contemplate what you have learnt here today and Remember contemplation is the key to learning.


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