Trading is a mental game. It is not just you against the market. It’s just you.” A famous quote by Mark Douglas, President Trading behavior Dynamics
This topic of trader Psychology is fascinating and also extensive. You could do a week long seminar and just scratch the surface on this topic and I will definitely not cover all the topics but I will cover some points that helped me .
- Forex trading just takes time, becoming a profitable forex trader is a journey,not just a destination.Try to become a better trader each day and reward yourself for the progress you make. You have to focus on learning the craft of technical analysis and improving your trading skills, rather than focus solely on your profit and losses in your forex trading account. Congratulate yourself and feel good about your trade regardless of the outcome if you as a trader stuck too your trade plan from start to finish.
- Profitable forex trades or in any market in fact learn to control their emotions. You are the weakest component in your trading system. By creating a forex trading system, we attempt to remove our ourselves from the the process of trading and become logical in our approach. As traders whether it would be day trading or swing trading the more we detach ourselves from the emotions of hope,greed and fear, the better chances of our success.
- Be responsible for your actions, you are the sole person responsible for your winning and losing trades. don’t blame the market .Don’t get caught up in personal denial, losses will happen as too will the winners but as a rule you will have to trade through the loses to get to the winners. just make sure your their for the winners.
- Never buy just because the price is low or sell because the price is high. Always have a good reason for initiating a trade remember the markets are always right. When place a trade you are looking for evidence, not proof beyond all shadow of a doubt.
- The volatility of margin FX and the gearing means we need to have patience,this a key to being a successful forex trader and mastering trading psychology. Staring at a 5 minute chart for hour will make you see trades that are not there .
- Over trading is a real factor in margin forex trading. making up for yesterdays losses will certainly lead to over trading. If you have negative morning session don’t think that you have to make it up by the afternoon.
My Fundamental truth about my trading Psychology
- Anything can happen
- You don’t need to know what will happen in order to make money. Do not try to predict anything or expect anything.
- There are random distribution of wins and losses for any given forex trading systems but the system gives you the edge.
- The edge is nothing more than an indication of higher probability of one outcome over another.
- Every minute in the market is unique.
Our trading system give us the our edge in the forex market, it is the execution of that system determines our success.
You must truly except these truths when entering the market. Forex trading is a probability game and that is how you must except it. Only then you will be consistent winner.
My Principles of Consistency
- Objectively define the edge
- Predefine the risk for each trade
- Accept that risk
- Act on your trading system without hesitation
- reward yourself as the market makes some money available
- Continually monitor your self for errors both in your Psychology and your execution of your trading system
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Thanks for your sharing, it’s very useful
FX day trading is the way to go but can be rewarding!