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Currency Trading Psychology
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Currency Trading Psychology
The fact is the majority of traders lose because they cannot
control their emotions and their emotions cause them to make
irrational trades and lose.
Trading psychology is one of the keys to investment success,
but its impact is not understood by many investors, simply think
they need a good trading method, but this is only part of the
equation for winning at currency trading.
The influence Of Hope and Fear
In currency trading psychology, two emotions that are constantly
present are:
Hope and fear. One of the traders who recognized this was
the legendary trader W D Gann.
Hope and fear are destructive emotions and all traders are
influenced by them, they are part of all traders’ psychology.
Hope and fear can make traders act irrationally, they know
what they should do, but they simply can’t do it.
Executing a trading method with discipline is the only way
to overcome destructive emotions.
Human Nature Is Constant – Exploit It for Trading Success
It doesn’t matter what market you trade:
Commodities, stocks, currencies, or what type of trader
you are, a day or position trader, the fact is, trading psychology
influences the majority of traders.
If you can control your emotions and trade with a disciplined
plan you can gain a trading edge.
A Disciplined Plan for Big Profits
You need to control your emotions by having a specific plan,
which if followed will gain you the correct currency trading
psychology.
Having the correct currency trading psychology is just as
important as having a good trading method.
Essential Reading for Any Trader
There have been some excellent writers on trading psychology
including: W D Gann Jake Bernstein, Larry Williams, Dr Van Tharpe
and Jack Shwager and you should read Shwager’s books Market
Wizards and the New Market Wizards.
Emotion is part of human nature. We cannot avoid them. All
we can do is control it and not make the mistakes the majority
of traders do and adopt the right currency trading psychology.
If a trader can adopt the right psychology, they will gain
a significant edge in their quest for long-term currency trading
success.
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