Forex Trading Psychology is a topic that is widely over looked by traders.
How truthful are we as traders, do we kid ourselves that we’re improving when we’re not, do we discover ourselves misleading our spouse, or partner at times; claiming that our trading is going well, when in fact our account is rapidly losing value? Do we exaggerate our success in discussions on online forums, because we’re afraid of admitting our failures, even to complete strangers, when we’re posting as a completely anonymous person?
Pride comes before a fall. Pride is an incredibly destructive emotion and characteristic were trading is concerned, it really must be left at the door. This is what we call Forex trading psychology control. Developing humility as a trader and doing so as early as possible into your trading career, is an essential part of building your own personal profile and code, not only as a trader, but also as a human being.
There’s nowhere to hide in trading, there’s no escape hatches, but there’s many trap doors, your trading success ultimately comes down to one key phrase; “show me your P&L?”
Truthfulness is both a fascinating word and concept, we should be truthful (be fully truthful) and develop and display openness were our trading is concerned, in doing so we can be sure that we’re approaching trading from the right direction and in the right manner using Forex Trading Psychology control.
Forex Trading Psychology
Discussing your trading performance may help
We must be truthful and open with our trading results as they’re the best guide to our future success. Having defined ambitions which you openly discuss on, for example, trading discussion forums, is a completely different concept to exaggerating your achievements. If you’re prone to exaggeration, perhaps because you’re embarrassed to reveal your true levels of performance, then you’re also the type of personality who’ll probably avoid asking for help.
Nearly all retail traders are self-made, it’s an individual occupation that is practiced in isolation, it isn’t a team sport, but that shouldn’t prohibit you from being open and at times asking for help. It’s often the fledgling traders who ask for help when they’ve discovered trading, they’re also likely to be received best by the wider trading community. Moreover, it’s often those who aren’t afraid to get out of their comfort zone and who ask difficult questions, who develop more quickly.
We also have to be completely transparent with our close family members. Hiding your trading failings to your spouse and loved ones can prove to be an incredibly destructive issue. We don’t have to put on a brave face were trading is concerned, any more than we’d deliberately hide from the fact that our small business was struggling.
And our personal trading business is a small business, we can regard our money as our stock but we have an incredibly low overhead small business to run. If our small business was struggling rather than develop a bunker mentality, discussing it with your close friends, or family may lead to solutions.
We may also be surprised at the input that close family members can have on our: trading approach, our relationship with the occupation and ultimately our trading performance, even if they have zero experience at trading. Discussing our emotional situation with our partner may reveal issues we’re having with trading.
Discussing our losses may lead to us lowering our risk per trade, or may lead us to continue trading, but only on a part time basis as it’ll be less risky to our family’s welfare. Be truthful and open with yourself and others were you trading is concerned, there’s nothing to be gained from misleading others, or yourself regarding your trading success.