Trading psychology plays a huge role in your journey as a forex trader as it will directly influence your account capital and attitude towards the market. All successful forex traders at some point had to master the art of having correct trading psychology or if not, they are yet still to learn this vital aspect of trading forex.
Trading psychology is mostly concerned with your discipline and how you react to different case scenarios in the forex market. Let us say for example GBPUSD is rejecting an Order Block, as a trader, we know that the exact case scenario is most likely to happen to EURUSD, but how you react will determine how the results will be.
One of the most important skills to master as a trader is how you handle your emotions in your everyday trading. Almost everything that we do as humans we are most likely to attach emotions, be it happiness or hatred, however in forex trading this will cost you a lot .as you do no need to attach emotions in fact I forbid you to use emotions simply use the knowledge you have acquired be it from our YouTube videos or mentorship .
Remember that the forex market does not move based on how people are felling at that current time. this tells you that as a trader you need to always put emotions aside, be it you are making huge profits or some losses.
Retail traders most of the time will be too focused on what the news forecast for that particular day say then they make decisions afterward for example NFP news announces a drop of -600k in the USA, retail traders will start looking for sell positions given the news announcement. Now such a decision is mostly influenced by emotions or fear of missing out (FOMO) than proper market analysis. Be it news or no news the market will always seek liquidity using order block as fuel to be volatile following institutional order flow to either sell or buy.
Most of the time news simply activates my pending orders. In the foreign exchange market, you are exposed to apex predators who wait to devour you. Every decision you make should be based on the understanding of institutional trading concepts. Incline your ears to everything we have covered, be it on YouTube or Mentorship.Forex Trading Psychology Is The Key To Your Success in forex trading .no matter how skilled you are if you have bad trading psychology, it will override your skill and render it useless and if you are not careful you will be paying a lot of different mentors. until you sit down and evaluate yourself.
Trading Pyschology Self-Evaluation Questions?
- How many trades did I take before blowing my account?
- And among those tradeshow many trades did I get right and how many trades did I get wrong?
- How many pips did I make per trade and how pips did I lose per trade?
- What was the reason I took the trade? and what was the reason it went against me? was it an early entry caused by fear of missing out?
- Did I check the directional bias of the market at least using daily, H4, or H1 time frame? If so then what went wrong? did I check liquidity pools if so? Then what might be the problem? did I check the dollar index? if so then what was the directional bias of the dollar index and were there any resting liquidity pools.
- What was the directional bias on the dollar index and what was the directional bias on the trade you took a loss?
- Was the dollar index at a significant level before you make your entry?
Learn to be calm and reflect on your trading results during weekends this will help you improve your trading psychology. always have your checklist before taking any trade don’t do things blindly so. forex trading psychology is one of the most underrated skills yet affects a lot of traders and the big participants in the market will always capitalize on that by price manipulation.