Forex trading mentality

Everyone who trades has some type of motive for doing so.

Although that may seem to be true for some, others find some type of glory in losing. There are several reasons why people trade and this article will cover all of them as well as the cognitive biases of novice traders. No matter what the form, they bring about excitement or drama. And though the likelihood of losing is great and everyone loses at least half the time, people still see them as some form of entertainment and thus, such activities become habit forming. Again, people like to trade for the following reasons:.

Why do you like to trade? Before you become engaged in such a risky activity, you need to realize what it really is that compels you to do it. Also, you need to trade with conviction, not fear.

How to Become Successful in Trading Forex?

Remember, strengths beget strengths and weaknesses beget weaknesses. You can change your ways of thinking anytime, but the market never changes and never will. Avoid falling for these types of cognitive biases that will emotionally influence your trading decisions:.

People tend to rely too heavily on readily available facts or myths from sources as the media. One may hunt down or interpret information in such a way that confirms with his or her preconceptions on Forex trading. As a result, this person will be subjective when analyzing market data. Such an act occurs when people place more value on money spent on a devalued currency they never resold rather than considering investing their money elsewhere.

How To Develop A Profitable Forex Trading Mindset » Learn To Trade

Instead of reselling their currency which sank in value, they write it off as a loss. In other words, traders under this bias continue to throw good money after bad. There are certain people who believe they can control everything in their lives. In reality, all one can control is his wants or attitude. No matter what one may believe, he cannot control external events as the market, the weather, or the actions of other people. Traders subject to this type of bias tend to seek out facts even if they have no affect on future actions.

They form their own comfort zone in trading and usually refuse to break out of it. At the same time, they unconsciously work so hard to preserve their status quo that they close their doors to new opportunities. People tend to judge their decisions based on the outcome rather than the logic used to come up with them. Hence, someone who loses at a trade will lose faith in their system and abandon it altogether. While sticking to a trading plan is good, there are circumstances as the market that might cause you to lose.

Others simply believe that they know everything they need to know about trading and that the market will continue to move in the same pattern it always has.

Hence, they deny that anything bad will happen and convince themselves they should not to worry about things that might go wrong. We must always remember that there is no holy grail system in trading.

There is no specific strategy or formula that will bring us guaranteed success every time we trade. Likewise, there is no wrong trading plan providing it is well thought out. As long as Forex trading exists, there will always be circumstances that make predicting the perfect trade impossible.

To summarize, you should understand why you want to trade and trade accordingly. If you rather do it for the excitement of it all, then do so. Also, never make assumptions about FX trading or that the market will continue to move the way it always has. Finally, losses are inevitable. Stay positive and remain emotionally neutral. You are only in charge of your desires and your attitude, nothing else.

The forming candle may likely close bullish engulfing on a strong support level. Will you kindly analyze it?

Yes, I am going to analyze it. It is right above the support lines I talked about on Dec 1st: Never get tired of posting Chris. Even if you are repeating your concepts. Repetition is the foundation of all learning. Thank you too Ted. Glad to hear you like our work. I wish you all the best in your life and business.

I want to take this opportunity to Thank You for every Single thing you do for us guys who follow you! Hey chris, i have a small doubt, forex market changed over the overs ri8 n constantly changing so we need to change our trading strategy regularly or can we stick with it?? Hey chris i have a small doubt, forex market has changed over the years ri8 so we need to change our trading strategy regularly or can we stick with it??? Markets are changed a lot. And most if not all the Bollinger band instruction from LuckScout.

Any recommendations I could add to my system? LuckScout my primary site for fx…hands down… Thank You. Sometimes traders are doing good, but they makes changes with the hope of making more profit, and they ruin the system. When you have found and are following the right track, just keep on doing it. Get Our New E-Books For Free. The Mentality Behind Forex Trading: Do You Trade Forex to Make Money or It Has Another Reason?

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