Although many courses teach how to trade FOREX, it may not be enough to provide sufficient training in the field of trading psychology. Some people say that the biggest enemy in the transaction is not the market but the trader himself. Why should consider the role of trading psychology? This article discusses the reasons.
Humans are naturally affected by emotions. These emotions include happiness, fear, excitement, anger, regret and anxiety. As a trader, we are sure to suffer the aforementioned damage. What traders must realize is that these emotions will have a major impact on our trading decisions and our trading results. If these emotions affect our transactions, they must be absolutely placed in the right perspective.
Let us begin with the idea that if the trading time is long enough, there will be winners and losers in the transaction records. Winning always brings happiness and excitement. On the other hand, failure often leads to a kind of regret similar to buyer's remorse, that is, "I hope I did not complete the transaction." Depending on the individual's emotional makeup, there will be different reactions to the same situation. For some people, a big win may mean that the invitation invites more risk than no other reason than invincibility.
In fact, a properly designed trading plan may require increased risk despite being within reasonable guidelines for money management. However, taking greater risks as part of the emotional response is potentially catastrophic. Some sort of emotional reaction has similar dangers to major loss of transactions. Feelings of fear and panic may make traders completely reject transactions or funds, with far fewer risks or rules.
There is no suggestion here, and the trader must have no emotion at all to succeed. However, a well-planned transaction plan must no longer emphasize emotions, but rather favor good research, fund management, timely execution, and reasonable risks. Emotions should never be an important driver of trading. Even after the failure of the deal, the key is to stay focused on the game plan. Initial traders may be difficult early, but as with everything else in the trading world, practice becomes easier.
The starting point for a trader to develop a good trading psychology is an honest introspection assessment of how he or she responds to certain situations. Then, through resolution, ensure that specific emotions do not affect the steps of well-planned strategies.
Copyright 2007
Sandy Robinson, JD
Orignal From: Forex - Basic Trading Psychology
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