Psychological preparation is very important when you want to
reach good stable results. The beginner, who has just started the trading
process, quite often considers Forex as something that is easy to learn, but
this is not true. Having earned a small sum in the beginning, he loses his head
and as a result can loose absolutely everything. During the first days of
trading, you can start writing down all the actions made by you. In a little
while, you might notice that there is not that much profit. You can start
analyzing your trading strategy and notice at once that it is not that bad, but
then you draw your attention to the comments: "closed too early",
"kept position open for too long", etc. The reasons of such
situations are unpreparedness and lack of confidence. Almost every trader who
has made at least a dozen deals, will agree that self-discipline, control over
emotions and the ability to make adequate decisions are vitally important
trading conditions.
There are too many nuances on the market, which cannot be
predicted. If you knew everything, you would be a perfect trading machine.
Because it is very important to understand that people are imperfect, it is
necessary to cope with the psychological state that can only disturb. While
trading on the Forex market, you stick to your own or borrowed strategy. You
place the order, and then you see that everything does not go the way you
planned. A majority starts to panic and close orders to reduce possible losses,
thus changing trading strategy. However, as soon as the order is closed, you
see that the graph moves in the desired direction, but the moment is lost. This
situation is an example of psychological instability. When tiny changes are not
in your favor and you are ready to escape. Only three results are possible
during the trading process: profit, loss or zero result. Of the three possible
situations, only one brings positive emotions, whereas the other two are soaked
with negative emotions. However, if you respond on every negative result with
panic, annoyance and fear, very soon, there will be no energy for trading. You
must learn to control yourself and your emotions and not consider every failure
as the end. Trading should benefit not only money, but also the joy of the
process. It is much better to use energy, spent on unnecessary emotions on
learning new strategies and enjoying moments of life.
Leverage can play cruel joke on traders. The effect of
leverage allows you to trade larger amounts of money than you invest. However,
leverage can either work on your side or against you. Some traders choose a big
size of leverage to operate bigger sums. It creates the illusion of
"unlimited opportunities without any risk", but actually it is not
always like that. A big volume of traded funds may bring great profit because
of the leverage, but never forget that along with income, there is a big possibility
to lose almost all deposits. Experienced traders advise to carefully analyze
and choose the size of the leverage that will help you avoid a high level of
risk.
It is possible to indicate three main phenomena of the work
on the market: greed, hope and fear. Each trader has his own reaction on every
emotion previously mentioned, but these emotions have one thing in common - in
excess they do not let you make correct decisions. Greed must be tempered, hope
- justified and fear motivating. Only under these conditions the emotions would
not harm, they will help.
Stress is the main newbie's enemy. People act differently
when in a stressful situation. Someone gives up and does not want to fix
anything, whereas someone decisively saves the situation. Trading on the Forex
market is second, after sapper, most stressful profession in the world.
However, if you know the core of the problem, you can solve it. It is extremely
important to study stress management skills. The sources of stress can be
different: from loss of several pips, to the attitude of your spouse towards
your work. External factors will always follow you, but you can change your
attitude toward them. The biggest enemy you struggle with, is you.
While working on the Forex market, you need confidence,
concentration, practice and persistence. After all, not absolutely everything
depends on trading systems and chosen strategies. It is quite hard to work and
overcome difficulties by yourself, but it will help you in trading and it will
become one of the main factors of success. Trading psychology is a very important
discipline, which must be studied by every trader, who counts on long-term work
on the currency market.