FOREX Trading Psychology How to beat your emotions?




It's known that most of traders lose because they can not beat their emotions and this causes them to make wrong-timed decisions and lose the most of their trading budget and forfeit quickly. Trading psychology is known to be the first and most important factor for trading success or failure but its impacts are not initiative by many traders, they are just thinking about getting a good trading strategy but this is only part of the equation for gaining at FOREX trading. In FOREX trading psychology, two emotions that are constantly present :Hope and fear are destructive emotions and all traders are influenced by them, they are part of all traders’ psychology as they are part of the human nature, it just differs from one to the other how can he controls them. In order to control these emotions and get the best out from your trades, I am listing below some tips that can help you achieve gains from FOREX :• Trade with a DISCIPLINED Plan: The problem with many traders is that they take shopping more seriously than trading. The average shopper would not spend $400 without serious research and examination of the product he is about to purchase, yet the average trader would make a trade that could easily cost him $400 based on little more than a "feeling" or "hunch." The plan must include stop and limit levels for the trade, as your analysis should encompass the expected downside as well as the expected upside. • Examine all of the facts carefully before you make a trade. Don't let excitement, fear, or someone else's influence cause you to enter or exit a position before the circumstances match YOUR guidelines. • What goes up must come down and what goes down should eventually come back up. A good trader understands that there are times when it's better to be in an all cash position and watching the market from the sidelines. • Don't let temporary circumstances erode your convictions: You know that you should take steps to protect your profits when a trend is weakening, so do it. Likewise, you know what to do when the stock resumes trading up, so do that to. • Don't fall in love (or hate) with your trades: The stocks don't care that you own them, and they are not your friends. Your only friend is your trading psychology. Pay attention to the technical aspects and do the right thing based upon your own system. Do not marry your trades: The reason trading with a plan is the #1 tip is because most objective analysis is done before the trade is executed. Once a trader is in a position he/she tends to analyze the market differently in the "hopes" that the market will move in a favorable direction rather than objectively looking at the changing factors that may have turned against your original analysis. Traders with a losing position tend to marry their position, which causes them to disregard the fact that all signs point towards continued losses. • Remain emotionally detached from the market and the excitement that its movement creates : Don't constantly check your share prices all day long (unless you're day trading). If you get caught up in "tick" watching then you are going to make wrong decisions based upon greed or panic. There is no valid psychology that includes greed or panic. • Unless you are a day or swing trader, the day-to-day prices of your stock are not that important. Stay focused on the large trends : and do not try to react to every market move. • Unexpected things, both good and bad : Understand these events, be prepared for them, and take the appropriate actions. A good psychology takes into consideration that you can not predict what is going to happen in the market. • Unless you're trading in short positions, only increase your position when prices goes up, not down : Generally, when a price starts to move it usually continues in that direction for a while. These tips are not new ones, they were discussed so many times across thousands of articles and books, but I can say you will success if you follow them typically and this is hard though it is not impossible to do. The best resource for FOREX trading is MoneyTec MoneyTec, - Active Traders Community Forum, Chat. MoneyTec is an online trading community that promotes mature, intelligent & respectful discussion in a positive & safe environment for everyone.--Balayya is an active trader at MoneyTec MoneyTec, - Active Traders Community Forum, Chat. MoneyTec is an online trading community that promotes mature, intelligent & respectful discussion in a positive & safe environment for everyone.Source: http://www.articletrader.com
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