Forex Trading- Using Emotions

Posted on January 25, 2009 @ 2:02 am
by cfdaustralia

Today in there are so many sites that will offer advice on succeeding in the Forex market and some will make some very bold statements, how to make a billion dollars trading Forex etc. Will point out to you that the biggest enemy you face is not the market itself, but rather your own emotions. Emotions are quiet often the difference between success and failure. One important statistic is that 95% of traders will go broke, and this has a lot to do with the emotional psychology of those traders. This is true in just about any activity that involves financial risk. It is really not all that different from playing a simple game of poker. If you start out being afraid of losing then it is more likely you are going to lose. People that have the best poker face tend to win poker.

It is pretty much accepted that most human beings have an innate desire to prosper. This desire is what makes failure so damn frightening. In most cases it doesn’t matter how you make your final decision always proceed with confidence tempered with caution.

Whether you use technical analysis or fundamental analysis or flip a coin. It really doesn’t matter as much as developing your own investment strategy. Just proceed with it until you are sure it is working or failing.

Never let your fears take over, and bounce around with no pattern. Overreacting to every setback will never work it will ultimately cause confusion and confusion will lead to a lose of money. However you should never get overconfident and let a small temporary success lead you into foolishness, one winning trade doesn’t make you a trading guru. Remain constant and stick with your plan- plan the trade and trade the plan.

When you are dealing with the Forex market it has some strange emotional landmines that you need to be aware of, and need to avoid, remember tread with caution. You are dealing with the currency of foreign countries and how they are going to be valued against the currency of other countries, one of which is your own country.

Emotion also plays an important part when find a Forex Broker, don’t go necessarily with a broker because you personally like them, find the Best Forex Broker because they are great. If you are unsure who to trade through the CFD FX REPORT has recently researched all the brokers and have done this without emotion if you would like to see who the experts suggest then visit there website. This maybe the best trade that you make is finding the Best Forex Broker .

It is important to keep things in perspective. If you find yourself cheering for Australian dollar and booing the US Dollar like they are your favorite football team and its biggest rival, then you should not be investing in this market, but saving for tickets to the next Football match.

Investment of any kind takes self control, and emotional stability, and Forex is no exception.

Trading in most cases is a mindset and you make sure that you always have a clear mind before placing any trades. If you have any doubt, whether it is something in your mind that doesn’t add up or a gut feeling then don’t place the trade as there is always more trading opportunites.

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