Psychology in Forex Trading refers to a trader’s mental condition or emotions. A trader’s success rate depends on 85% of their Psychology. If the mindset is not stable, a trader cannot make sound trading decisions.
7 Tips to Help Maintain Good Psychology in Forex Trading
- Do not trade when you are angry
- Do not trade when you are in debt
- Do not trade when you do not understand what you are analyzing
- Do not open the chart alongside any social media platform
- Appear on the chart daily but do not take trades daily
- Set a simple and achievable trading plan with realistic and achievable goals
- Read more so you can stretch your mind
1. Do Not Trade When You Are Angry
People tend to stop thinking well when they are angry. As a trader, you will not make sound trading decisions when angry.
If you are angry, disconnect yourself physically and mentally from the Forex charts. You don’t want to blow all you have gained consistently over a long period.
If your anger is caused by losing trades, do not blame yourself because that will lead to poor trading habits. You need to accept the fact that every human being develops emotions. What’s important is to learn to control your emotions so they cannot affect your entire trading career.
2. Do Not Trade When You Are in Debt
If you have debts to pay, do not use the money meant for debt settlement to trade the Forex markets. Forex trading is risky, and you can lose the whole amount. Remember, your capital should be an amount of money that you can afford to lose.
To avoid depression:
- Settle that debt first, then look for capital for trading.
- Do not borrow money for trading.
3. Do Not Trade When You Do Not Understand Forex Chart Analysis
Review your notes if you have a trading strategy but do not understand the charts. If you do not understand the whole concept after trying the strategy for a long time, the strategy does not align with your personality. Find one that works for you, then stick to it.
4. Do Not Open the Chart Alongside Any Social Media Platform
Social media consumes people’s time without them realizing it. You may miss an excellent market entry if you view a newsfeed on a social media platform or chat with a friend while on a Forex chart.
In addition, social media leads to procrastination. When it’s time to conduct analysis, turn all the platforms off.
5. Appear on the Chart Daily but Do Not Trade Daily
You don’t need to take trades daily, but you must appear on the chart daily to find out what’s happening and where the market is.
Your objective is to look for setups with high probability. That will help you trade only setups that respect your trading plan rules.
6. Set a Simple Trading Plan With Achievable Goals
Do not aim to make a living out of Forex Trading when you are just getting started. Like any other business, you can not expect to make a stable income within the first few months.
7. Read More to Stretch Your Mind
A mind that is stretched cannot go back to its former state. Reading Forex trading articles expands a trader’s knowledge.
Ensure you read at least one Forex book per month. You can also take advantage of the free articles available at OpWell Forex and other similar blogs.
Do not allow losses to define or knock you down. Learn from your mistakes and try to avoid repeating the same mistakes. Let us know in the comment section if you like this helpful Psychology in Forex Trading article. See you on the last topic of this Forex trading course.