Successful forex trading is not down to trading education and creation of a successful trading strategy based on fundamental or technical analysis, instead, it is about managing the emotions which are showing while enforcing that strategy. It is very known fact that there are so many good trading strategies in the world, but not that many successful traders. This is based on the fact that without good emotions management, we can make even the best trading strategy to perform very poorly.
Emotions are part of the human nature and they may manifest while we are trading as positive or negative feelings. Many novice traders ride an emotional rollercoaster, feeling on top of the world after a winning trade, but down in the dumps after a losing one. In order to become consistently profitable, you have to stay rational and emotionally detached. Manage or control your emotions and you are managing or controlling your success in forex trading.
The biggest enemy to your trading success is not the market. It is you the trader, actually your uncontrolled emotions while trading. In order to develop the right mindset, a trader’s psyche you need to know what to expect when trading. You must be prepared for a variety of emotions so that you can monitor them, instead of letting them control you. Only by staying on top of your emotions you can stay focused on the key to successful trading: maintaining a consistently profitable long-term strategy in the middle of many smaller short-term wins and losses, even when these short-term outcomes seem overly distracting.
Simple as it sounds, forex trading psychology is a crucial aspect of successful trading. Trading psychology has to do with the emotional state of mind when trading. Most times, people fail in forex trading because of emotions and trading anxiety that can result in uncalculated trading. The consequence normally is poor returns! To trade efficiently, you have to take charge of your emotions, eliminate any trading anxiety, be confident and ensure you avoid silly trading mistakes that can cost you money.
You will be more successful when you learn to control your emotions. These are strong words of advice first offered by trader Edwin Lefevre in his book entitled Reminiscences of a Stock Operator in 1923. This book is well worth a read to any trader. You can never control the market and you can never control how any given trade will turn out. But, you can learn to control your actions and emotions with a solid trading plan and by keeping yourself productive.