RSS
Tools
Apr 3
6.4 The Psychology Of Individual

 

Overview of Forex Trading Breakout:
1. Taking responsibility of your forex trading capital
2. Cut your losses early and let your Profits Run
3. Discipline
4. Too much information
5. Do not marry your trades
6. Do not bet the farm
1. Taking responsibility of your forex trading capital :
In forex trading it is exciting to know how most of the people are glad to place their savings and fund in other peoples hands, but does not acknowledge forex trading losses as its convenient to blame someone else instead of taking responsibilities of those forex trading funds themselves.
The first step for a successful forex trading as an individual is the believe in yourself and your abilities. One of the most amazing findings when you begin forex trading or may have examined from the stock market is that how many experienced people get it so incorrect so many times.
You will be in a forex trading market that moves numerous times faster than other market and with leverage, the gains and losses multiply many times. The best way to overcome the fear of losing your money in forex trading is to talk in terms of points. Therefore, instead of calculating your profit and losses in terms of dollars, talk in terms of profits and losses in points. Sooner you adopt this in forex trading it will feel the same as a demo, a mini or 10 contracts of a full account.
When forex trading a demo account numerous people do very well. As they trade without fear of loss. When its with real money, even with small account they quickly find themselves forex trading in a manner where they are not able to avail chances and accrue numerous losses. They quite simply could not control their nerve and give into fear. This also occur when you go from small account to a huge account or from forex trading single contracts to forex trading numerous contracts.
Always avoid fear factor first and then begin your forex trading. Think about the points, no matter how many contracts you are forex trading or even during forex trading a demo account.
2. Cut your losses early and let your Profits Run :
This is not as simple as it seems, in fact its most difficult to implement and reason of many traders downfall. Most traders defy their scheduled plan and take their profits prior to reaching their profit target as they don’t feel comfortable sitting on a profitable position.
These very people will simply sit on losing spots, permitting the forex trading market to move against them for hundred of points in anticipation that the forex trading market will return. Further, traders who have had their stop hit on few occasions simply se the forex trading market go back in their favor once they are out, are rapid to remove stops from their forex trading on the belief that this will always be the case.
Stops are supposed to be hit, and to stop you from losing further then a scheduled amount! The wrong belief is that every trade should be for gain. If you can get 3 out of 6 trades to be profitable then you are doing well.
Then how can you make money while having only half of your trades being a success? You only permit your profits on the success to run and confident that your losses are low.
One more good plan can be to move stop losses (the point the will be sold if it goes the other way around) behind the trade to a level where a pull back can be hold but a turnaround will lock in at least some gain.
3. Discipline :
Do forex trading with well organized strategy. The problem with many traders is that they consider shopping more serious than forex trading. The average shopper would not Risk $ 400 without first conducting a research and analysis of the product that he wasn’t to purchase, still the average trader would not hesitate to make a trade that could easily cost him $400 based on little more than a “feeling” or “hunch” Be certain about your plan in place before you begin to trade. The plan must have stop and limit levels for the trade, as your examination would include the anticipated downside as well as anticipated upside.
4. Too much information :
Having so much efforts it is significant to keep your forex trading simple. Many traders begin with a simple plan that turns out well but despite success they keep on changing for a better system. They also let themselves to be effected by other views and too much fundamentals. It is not very much other than from going to a race track where every one has an information on hand that can become so puzzling that you can no longer see the wood from the trees. Forex trading the stock market is very much similar in this regard.
Another way to understand is to teach a child a simple forex trading plans and some basic set of rules to follow while forex trading. then allow them to trade on demon account. Many traders who have done this exercise were surprised to find out that their children can trade much better than they themselves do. This is because they don’t stray from the rules and they are not as influenced by the media, they follow simple rules and do well. Therefore the rule here is to keep in simple, don’t be confused with too much information and if you are not confident or are not in a proper frame of mind, stay away from the trade.
5. Do not marry your trades :
Why forex trading with a plan is important? Because most of the examination is completed prior to the trade execution. When a trader is in a position they trend to examine the market some other way in the “hopes” that the forex trading market will move in a direction that would favor other than objectively observing the changing factors that may have turned against your original analysis. This is factual about losses. Traders with a losing position are inclined to marry their position that bring about to disregard the fact that all indicators point in the direction of constant losses. Never take more trades in expectation that the forex trading market will turn in your favor, in fact it will only increase your losses.
6. Do not bet the farm :
Do not excess forex trading - this is one of the most usual mistakes that traders commit is leveraging their account very high by forex trading much bigger volume than their would sensibly trade. Leverage is a double edged sword. Only because one lot (100,000 units) of currency only needs $1000 as smallest deposit, it does not intend that a trader with $5000 in his account would have the ability to trade 5 lots. One lot is $100,000 and would be seen as $100,000 capital spending and not the $1000 put up as margin. Most traders examine the diagrams properly and place prudent trades, still they inclined to over leverage themselves. As a result of this, they are frequently enforced to leave the position at the incorrect time. An excellent forex trading reliable method is to trade with 1-10 leverage or never use more than 5% of your account at any given time. Forex trading currency is not simple. if it was everyone would be doing this business and making millions.

Overview of Forex Trading Breakout:

1. Taking responsibility of your forex trading capital

2. Cut your losses early and let your Profits Run

3. Discipline

4. Too much information

5. Do not marry your trades

6. Do not bet the farm

 

1. Taking responsibility of your forex trading capital :

In forex trading it is exciting to know how most of the people are glad to place their savings and fund in other peoples hands, but does not acknowledge forex trading losses as its convenient to blame someone else instead of taking responsibilities of those forex trading funds themselves.

The first step for a successful forex trading as an individual is the believe in yourself and your abilities. One of the most amazing findings when you begin forex trading or may have examined from the stock market is that how many experienced people get it so incorrect so many times.

You will be in a forex trading market that moves numerous times faster than other market and with leverage, the gains and losses multiply many times. The best way to overcome the fear of losing your money in forex trading is to talk in terms of points. Therefore, instead of calculating your profit and losses in terms of dollars, talk in terms of profits and losses in points. Sooner you adopt this in forex trading it will feel the same as a demo, a mini or 10 contracts of a full account.

When forex trading a demo account numerous people do very well. As they trade without fear of loss. When its with real money, even with small account they quickly find themselves forex trading in a manner where they are not able to avail chances and accrue numerous losses. They quite simply could not control their nerve and give into fear. This also occur when you go from small account to a huge account or from forex trading single contracts to forex trading numerous contracts.

Always avoid fear factor first and then begin your forex trading. Think about the points, no matter how many contracts you are forex trading or even during forex trading a demo account.

 

2. Cut your losses early and let your Profits Run :

This is not as simple as it seems, in fact its most difficult to implement and reason of many traders downfall. Most traders defy their scheduled plan and take their profits prior to reaching their profit target as they don’t feel comfortable sitting on a profitable position.

These very people will simply sit on losing spots, permitting the forex trading market to move against them for hundred of points in anticipation that the forex trading market will return. Further, traders who have had their stop hit on few occasions simply se the forex trading market go back in their favor once they are out, are rapid to remove stops from their forex trading on the belief that this will always be the case.

Stops are supposed to be hit, and to stop you from losing further then a scheduled amount! The wrong belief is that every trade should be for gain. If you can get 3 out of 6 trades to be profitable then you are doing well.

Then how can you make money while having only half of your trades being a success? You only permit your profits on the success to run and confident that your losses are low.

One more good plan can be to move stop losses (the point the will be sold if it goes the other way around) behind the trade to a level where a pull back can be hold but a turnaround will lock in at least some gain.

 

3. Discipline :

Do forex trading with well organized strategy. The problem with many traders is that they consider shopping more serious than forex trading. The average shopper would not Risk $ 400 without first conducting a research and analysis of the product that he wasn’t to purchase, still the average trader would not hesitate to make a trade that could easily cost him $400 based on little more than a “feeling” or “hunch” Be certain about your plan in place before you begin to trade. The plan must have stop and limit levels for the trade, as your examination would include the anticipated downside as well as anticipated upside.

 

4. Too much information :

Having so much efforts it is significant to keep your forex trading simple. Many traders begin with a simple plan that turns out well but despite success they keep on changing for a better system. They also let themselves to be effected by other views and too much fundamentals. It is not very much other than from going to a race track where every one has an information on hand that can become so puzzling that you can no longer see the wood from the trees. Forex trading the stock market is very much similar in this regard.

Another way to understand is to teach a child a simple forex trading plans and some basic set of rules to follow while forex trading. then allow them to trade on demon account. Many traders who have done this exercise were surprised to find out that their children can trade much better than they themselves do. This is because they don’t stray from the rules and they are not as influenced by the media, they follow simple rules and do well. Therefore the rule here is to keep in simple, don’t be confused with too much information and if you are not confident or are not in a proper frame of mind, stay away from the trade.

 

5. Do not marry your trades :

Why forex trading with a plan is important? Because most of the examination is completed prior to the trade execution. When a trader is in a position they trend to examine the market some other way in the “hopes” that the forex trading market will move in a direction that would favor other than objectively observing the changing factors that may have turned against your original analysis. This is factual about losses. Traders with a losing position are inclined to marry their position that bring about to disregard the fact that all indicators point in the direction of constant losses. Never take more trades in expectation that the forex trading market will turn in your favor, in fact it will only increase your losses.

 

6. Do not bet the farm :

Do not excess forex trading - this is one of the most usual mistakes that traders commit is leveraging their account very high by forex trading much bigger volume than their would sensibly trade. Leverage is a double edged sword. Only because one lot (100,000 units) of currency only needs $1000 as smallest deposit, it does not intend that a trader with $5000 in his account would have the ability to trade 5 lots. One lot is $100,000 and would be seen as $100,000 capital spending and not the $1000 put up as margin. Most traders examine the diagrams properly and place prudent trades, still they inclined to over leverage themselves. As a result of this, they are frequently enforced to leave the position at the incorrect time. An excellent forex trading reliable method is to trade with 1-10 leverage or never use more than 5% of your account at any given time. Forex trading currency is not simple. if it was everyone would be doing this business and making millions.

 


Emotional & Behavioral Part

 

6.1 Trading Psychology

6.2 Trading Like A Pro

6.3 Psychology Of The Market

6.4 The Psychology Of Individual

6.5 Keep A Cool Head

6.6 Mind Over Profits

6.7 The Battle Against Human Nature

6.8 Face the Truth of Forex Trading

6.9 Overcome The Barriers Of Trading

6.10 Expectations Vs Reality In Trading

 

 


 

 

Forex Education

 

The Basics of Currency Forex Trading

Technical Analysis

Technical Indicators

Fundamental Analysis

Intraday Trading

Emotional & Behavioral Part

Risk & Money Management

Trading Guide