In addition to gathering knowledge, planning the strategy to ways to execute the trades, there is one other factor that affects your forex learning process as well as in the forex market. That factor is psychology, both for you and for the other traders. How you control yourself and how you understand others, then control them is one of the ways to succeed the forex business.
How the emotion gets in the way
When you are letting your emotion controls you, you might make an impulsive decision that you don’t originally want to. This doesn’t just happen in the trading world. Human has emotion and controlling one’s emotion is no doubt one of the hardest things to do. We want more, we fear, we hesitate. Managing your emotion in the forex market is even more important.
This is because when trading forex, the movements and changes are very quick and you must make a decision in a very short amount of time. This is not as easy as it may sound, because your thinking and decision is rushing around and it’s hard to keep them healthy and sane during this kind of situation.
This takes years to master, based on what successful forex traders have experienced. Grinding this skill is important. Mastering the psychology of oneself will help you control the greed and fear as well as the feeling of hesitation that we may often come across while trading forex.
What are these emotions?
When you follow your emotions, it means that you are judging everything based on your feelings and not data, news or any other reliable source of analysis that you can use. Feeling is different, it is not logical and when it does work, it is most likely because of the chance of probability that is pretty low if you would check anyway.
Forex market is complicated and require a lot of analysis, so if you rely on solely feelings then you are going to mess it up. Don’t mistake this for not using intuition. Intuition is simply there to tell you that something’s going on and you can base yourself on intuition when all the original arguments or reports are done before.
When it comes to leaning forex tor the first time, you might intend to enter the market empty handed and hoping for the best. This isn’t a good advice. The other emotion that people face often is greed, especially if you just won. The winning makes you optimist and want to make more money in just one trade.
This comes back to the previous emotion which is feeling. You might feel like you have won and you will win again, so you do less analysis or collect no data. Some important factors will be put aside if you combine these two emotions together. Again, you end up putting your money at risk this way.
This doesn’t mean that you are supposed to limit the profit that you get, but rather to control the expectation and emotion. So, if something is going on in a bad way you won’t get as mad, and you can spend more time analyzing what to do next. It’s more of the effectiveness of your time to learn forex, really.
Having a target profit, especially when you are learning forex, would be one way to treat these emotions. Don’t put the target too high, just the number that you are comfortable with. Don’t really think about them way too much. If you do want to think about it, might as well hire a trading mentor such as the one from Didimax. Happy forex learning!