To keep control of your emotions in trading, you need to practice good trading psychology. This is a way of changing your mindset and becoming as logical as possible. Traders experience forex trading failure due to conflicting feelings. To achieve success in trading, you have to accept that forex is risky, and while money is involved, it is not always about money itself.
Fear
Your fear in trading comes from the excitement of profiting large sums in a position, which heightens your anxiety and your fear of not achieving that desired profit. Our fear of losing our capital and benefits makes it challenging to be level-headed in trading. We overthink of the outcome of the trade, and so we lose focus, then get carried away by our market emotions.
Greed
Some forex traders get too excited about profiting in a position that they intend to keep it open until it eventually comes to them that they are losing. This is known as forex overtrading. It is a common scenario in the forex market and a bad example of forex trader psychology. Our greed for profits tends to make us overlook reason, being too caught up in the profits we gain.
Hope
This emotion could easily be one of the most damaging and deceitful in forex trading. It can be hope in making a profit or hope that the market goes in your favor. Forex traders have the desired benefit in mind. You might think that you have the right market analysis and trading strategy, and so you hope to make profits out of a position. But this could easily be proven wrong with the uncertain conditions of the market. The forex market is always volatile.
Discipline and Good Forex Trading Psychology
In utmost, you have to maintain trading discipline. This good forex trading psychology will lead you to success in trading, but only as long as you keep it up. It takes practice, as this new trading mindset or psychology will not happen overnight. Discipline is one of the most important factors of forex trading. However, once you have mastered this good forex trader psychology, you will find yourself making good trades naturally.
Lack of Knowledge or Bad Forex School
It is also an important matter to point out that forex schools should cite this kind of good forex trader psychology. Traders must learn about controlling their emotions and imposing trading discipline in forex schools. If you want to learn more about it, be sure to pick a forex school that does not only teach you how to trade but also how to deal with the risks and how to create a right trading mindset or psychology.
Conclusion
Forex is more than just a matter of skills and analysis, and it also takes the right trading mindset to achieve success in trading. You have to control your emotions. As some have pointed out, forex trading is 20% skills and 80% trading psychology. These factors have to be faced headfirst by the forex trader equipped with good trading psychology.