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Emotions in Forex trading
Written by: PaxForex analytics dept - Tuesday, 08 November 2016 0 comments
Despite the long-term development of the Forex market and its popularity, many new traders intuitively believe that in trade is sufficient to rely on luck and intuition, and thus are making a huge mistake.
It’s impossible to earn, trading on emotional basis only. It is important to correctly calculate your own forces, monitor the market, and in any case do not give in to emotions. Emotions in Forex, as well as in any other market, will not give anything good. Therefore it is necessary to keep a well thought out strategy and carefully study the market, constantly monitoring its changes.
This approach will help not to lose money as Forex is renowned for its volatility. If a person does not have a strategy, emotions can have an impact on his decision, and this decision with great probability would not be correct.
Basics of earnings on forex – technical and fundamental analysis, systematization, and confidence. Confidence not only in yourself, but also on the chosen strategy.
Experienced traders recommend beginners to create their own strategy and not deviate from it under any circumstances. Such a system indicates how, when and what to buy and sell. Following a single vector will do the maximum profit to come.
to create a system that will be based on a technical analysis of past market changes, because all changes are cyclical. Even with a huge trading experience, people continue to use the strategy, because it is also convenient.
In cases where the intuitive and system solutions diverge, the system will mostly be right in nine out of ten cases. And the one lucky case that came from intuition will be associated with a poor-quality training system, signaling you that there is a problem with your system.
The mechanical system completely removes emotions from trading, relieving the trader of one of the possible catalysts of loss. Since the system does not change due to human emotion, it does not allow to make hasty conclusions, forcing to go on the chosen path.
The efficiency does not depend on whether the trader has developed a system himself or adapted it from someone else. The main task of the system is to define the start and end points of the transaction, the choice of mitigating factors and strategies to end your trading deal.
Trading without a system is doomed to loss. The main task of the trader is to watch the market and its changes. Do not give in to emotions and to move away from the chosen direction. The seriousness and discipline are the keys to success.