Psychology of trading

Many people don't prepare themselves in terms of psychology to come into the world of trades. But  unprepared actions may lead only to loss. Let's find the reason, why it happens. First of all, it's recommended to keep recordings with all actions including achievements and failures. Do not forget to scrutinize all actions you make after each transaction. Now let's make it clear, why loss may happen.

One of the main reasons - fears, especially the fear of failure. We are always afraid to loose what we have. In this case we are afraid to loose our deposit. When we fear something, we attract negative emotions and become its producers. And how do you think, what happens next? We automatically make wrong decisions and get what we were afraid of. So, how to fight this fear?

There is a number of techniques to cope with fears. We have analyzed them and pointed out the most important.

Positive determination:

  • try to smile before you start trading. Of course, you can say: "And what about emotions? They are against me!". Yes, you are right, but your smile is just a way to create a positive work atmosphere. If you have a good mood, your mind is clear and your thoughts are firm. Now try to preserve this positive state and start to work without emotions;
  • more often, we have two feelings: euphoria – when we earn something and disappointment when we don't. What happens next? Next to euphoria our ego comes out and our self-esteem rises so much that we no longer control our emotions and set them totally free. As a result, the next decision we make is usually wrong, moreover, the situation is no longer in our control. After disappointment we usually act like a player: we try to take our money back as soon as possible. But this is not a game, it's a serious work. That's why our feelings shouldn't go further than simple smile;
  • what to do if you made a mistake? It's better to stop. Stop to think and try to understand, why you made this mistake. Different types of analysis can help you out. As soon as you find the reason of failure, you can move further;
  • before trade you should be confident in every step you make. If you haven't got enough confident today, it is better to set trading aside even till the next day;
  • you should always plan your income and probable loss;
  • when you are clear about how much you want to earn and howyou can lose in a certain trade, you won't feel negative emotions in case of mistake. Everything will go according to your plan. But the point is that your income also will be planned. When you earn the positive income, you should stop the trade the same day;
  • the work on this market involves psychological stress. That's why it's necessary to relax and start again with fresh ideas and energy.

Conclusion: be confident in everything you do. The market clearly mirrors our problems and fears. Often a market trader suffers from loss, though he  uccessfully handles all types of analysis, but ignores the psychological aspect of trade. Therefore, our thoughts have a primary importance and should be clear and ready to work.

Learn how to control emotions in the Forex.

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