Forex world

November 14, 2022

Forex trading psychology

Forex trading psychology is an important issue that determines the success or failure of a trader, this article will suggest how to control forex trading psychology.

The very essence of trading psychology is the battle between you - and your inner self (ego).

You, will appear when you are in the most relaxed and comfortable psychological state, which is a balanced emotional state, everything is clear and quite clear the way you see it, based on knowledge and experience. your own, is the natural and inevitable outcome of the trading system you have built over time.

The ego, will only appear when you are out of balance emotionally. For example, when you are sad (because you just lost a trade, because other work is not satisfactory, or life has a problem,...), like when you are happy (just won 1 trade, new. pick up money,...), or when you're angry, when you're excited, even when you're drunk... Generally when an emotional imbalance occurs, then the ego can appear.

Over time in the long run, as a matter of fact, you only trade purely according to your personal system, surely the results will gradually get better, because you will always be able to balance your emotions, thereby overcoming the problems. errors and promote the advantages of the trading system.

However, if that process has an ego in it, it will be like a seed, it will grow, after each decision to enter or exit an order, there is an ego that interferes, if that decision is correct then The more ego will be satisfied and gradually gain "trust" from you... gradually as you become dependent on the ego, you will almost only trade on emotions.

We know that every trading system contains its own rules of trading signals, and methods of capital management, which are objective. But recognizing, evaluating and judging those signals is subjective.

Now, with such a view of trading psychology, we find it quite understandable that a beginner forex trader (especially trading the first orders) has a higher win rate than traders who have already traded a lot time. From a technical point of view, most newbies have not built a trading system, they simply look at the price chart, when the price is going up, they buy, when the price is down, they sell. That is, most of them are trading according to the trend of the market, a NATURAL AND OBJECTIVE way, this is completely different from a longtime (unsuccessful) trader when trading even with a price chart and Similar tools, in their head they will draw a system FOLLOWING an ego that is always fighting - discussing - convincing with themselves in a split second, when making an entry decision. And of course, the results are different: one side wins and the other loses.

Now, I summarize the process of trading psychology, more specifically, the process of domination and domination of the ego in your trading process as follows:

- The begining:

The ego starts to encourage and praises you when you start to have your first winning trades, it praises you for your talent, you were born to be a trader,... Ego also knows how to comfort you when you lose the battle, that it's just an accident, be confident and steadfast in the chosen path... At this stage, the ego is like your new friend, always present to share your joys and sorrows, ... and deep down in you, you already have sympathy and the fact that the two of you will soon become soulmates is already in your mind.

- Companion:

The ego is already part of your journey to becoming a trader, the two of you have become best friends, all your trading decisions are the result of discussion and discussion from both of you. Every time you make a decision. If that decision is right and profitable, the ego praises you excessively. And when you lose, it's also comforting and encouraging and there are always "sounds very reasonable" reasons to convince you that it was just a small incident... gradually, you didn't notice that every decision now it's mostly your ego that convinces you to do it, not simply from what you yourself have learned and experienced. However, there is one point that you do not notice, your soul is as primitive as the dawn, pure and bright, and that environment is not suitable for the ego, so the ego will only appear when Your mind is out of balance.

- Occupy:

After a long process of accompanying each other, the ego now has a solid position. All your decisions are governed by the ego. You are already dependent on it, you can hardly stand on your own two feet like in the beginning.

So, in summary, most of us forex traders will go through this journey of trading psychology, what will need to be done to solve this problem, here are a few suggestions:

- Make an effort to learn and understand the psychology of forex trading.

- Focus on trading psychology, that will inevitably come when you understand it correctly and fully understand it.

- Practice the habit of "self-observation", we need to observe all our emotions in all our daily activities in life (not just forex trading), when a problem occurs We need to calmly observe ourselves inside, to understand how the psyche is reacting to that problem, whether inside we are happy or sad, angry or excited, or disappointed. ... When we observe enough, we will understand that those emotional states are just the ego, the ego is sad but we are not sad... This problem if practiced and achieved results After a process, we enter a state of "MEDITATION" - meditation anytime - and anywhere. Note that we should not consider the ego as the enemy, and do not try to chase it, conquer it, because when we do it will grow bigger and stronger... the simplest and most effective is that we just need OBSERVATIONS - THAT'S ENOUGH.

- After the process of observing yourself, you will gradually realize that trading decisions should be your own choice, no need for ego to interfere. The trading decision will be based solely on the trading system that you have built. Note that, here the "experience" factor also needs to be technical (expressed by specific signals and tools), it is a tangible, quantitative factor.

- Maintain and stay awake: When you achieve the above, you have entered the "emotionless trading" state, I am sure here you will reap the results, but always stay awake , because the ego is always there, seeing you succeed it will still continuously give you compliments, with the aim of returning to accompany and dominate you. Remember to stay awake, maintain what you are doing, it has brought good results, no need to change anything.

Within the scope of this article, I can only share a little of the above. Hope it helps you. And of course, we will see you again in the next sharing posts.

Best regards,


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