Forex Trading Psychology

by : Monica Hendrix

It's a fact that most traders lose because they don't have mental discipline and the reason for this is quite complex in that to have discipline you have to have certain traits that are not considered good in normal society - but there essential in forex trading.

Forex success is available to those traders who understand the following:

Robust Simple Method + Applied with Discipline = Forex Success

Of course if you don't have the discipline to apply a method with discipline, you really have no method in the first place.

1. Consult an Expert

The first thing to understand is that discipline comes from confidence in what you are doing. If you don't understand how and why a forex trading system works you will ever have discipline - PERIOD.

To many traders follow gurus or mentors and expect their forex trading system to lead them to success - yet most of the systems sold are junk or the logic is simply not understandable and the traders lacks the discipline to follow it - as soon as it hits a few losses ( and all trading systems do) they throw in the towel.

If you take the time and trouble in your forex education to learn all the reasons why a system is likely to work then you can succeed.

Today we are taught that the experts know best but in forex trading this is very often not true.

2. Isolate Yourself

In life no one likes to be on their own - man is a pack animal and since stone age times we have grouped together for safety. In the forex markets thought follow and join the herd and you will lose your equity so stay isolated.

3. Make Your Own Rules

In life we are taught to obey rules and our lives are structured. In the forex market however we have to make our own rules up and live by them and this is hard for many traders, they simply cannot take responsibility for their actions.

The market is an all powerful force and it moves as when it wishes where it wants to and finally only you can be wrong and it's always right.

You either accept this and construct rules to live by or you fail.

4. Money is Not Important

Of course it is - but in forex trading you have to treat money as if its not. If you don't your emotions will get involved and you will never be able to run profits and cut losses.

Most traders run losses as they don't want to take a small lose and when they get a profit they get so excited they want to grab it before it gets away. Most traders snatch marginal profits whereas if they had held on and had the courage of their conviction they could have made a huge profit.

5. Profiting From Others Failure

Your on your own in trading and its dog eat dog and you make money from others failure it's as simple as that.

Obtaining discipline is simply not easy and as you can see, many traits considered great in normal society need to be re thought. Of course anyone can adapt and trade with discipline in the forex markets it just depends on whether you are prepared to adopt a new mindset.

If you do adopt a new mindset then currency trading success can be yours.