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Forex Trading Psychology Articles
Written by Aboutcurrency
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It is said that currency trading is 75% psychological and 25% methodological. Your biggest enemy, when trading the forex, is within yourself. The two most prominent human emotions which fail you are fear and greed.
Trading success will only come when you learn to control your emotions. Learn more about trading pschology and improve your trading.
Trading Psychology Articles:
How To Trust Your Setup
Forex Trading Psychology | Written by Written by BKTraderFX
One of the great ironies of life is that as traders we often trust ourselves least of all. Most traders (myself included) approach the whole enterprise with deadly combination of overweening sense of arrogance in our ability and underwhelming sense of confidence in our trade setups.
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The Most Common Problem Traders Face
Forex Trading Psychology | Written by Brett N. Steenbarger
There's one problem that seems to be universal to traders, whether they're professionals trading in large banks or funds or part-timers trading from the home: performance anxiety.
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Serious Money
Forex Trading Psychology | Written by BKTraderFX
Let's face it, as currency traders we are in the markets because we love to trade. We don't pore over balance sheets looking for misalignment in cashflow calculations like the credit gnomes in the bond market.
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Learning To Stop Forex Trading
Forex Trading Psychology | Written by Rob Booker
We talk a lot in the trading world about when to trade; we talk about entries and exits and profit targets and stop losses and moving average crossovers. There are endless threads on massive online discussion boards about trading the news, or whether inside price action "Wicked Fairy" candles are better than "Samurai Warrior Face" inside bars.
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Courage Under Stressful Conditions When the Outcome is Uncertain
Forex Trading Psychology | Written by Jimmy Young
All the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery “You gotta be in it to win it”. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.
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Know Yourself, Know Your Setup
Forex Trading Psychology | Written by Boris Schlossberg
Who are you? What are your strengths and what are your weaknesses? Do you thrive amidst chaos or require regimentation and stability? In trading, the answers to these questions are far more important than any setup you can devise.
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Why Demo Account Perpormance Is Often Better Than Real Account Performance?
Forex Trading Psychology | Written by WCFOREX
Over the past several years, the popularity of online currency trading has grown substantially. Each day, online FX brokerage firms attract new investors - each of them lining up with a glint in their eye, lured in by promises of easy money.
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Improving Your Trading Performance: The Single Most Important Step You Can Take
Forex Trading Psychology | Written by Brett N. Steenbarger
A chess player analyzing the board for the next move; fighter pilots maneuvering their planes to get a lock on enemy aircraft; a baseball player tracking the release of the ball from the pitcher’s arm; ballet dancers executing their leaps...
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Don't Change Time Frames To Stay In A Losing FX Trade
Forex Trading Psychology | Written by Daily FX
Too many times I hear about new traders opening a trade using the 5-minute chart (not my favorite approach) and when the market moves against them, they move to the 15-minute chart to justify staying in a little longer, hoping that the market will turn around.
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Emotion Management System
Forex Trading Psychology | Written by Dima Chernovolov
Emotion management system is the subsystem of the forex trading plan which controls how closely you follow your trading system and your money management system.
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A Trader’s Self-Evaluation Checklist
Forex Trading Psychology | Written by Brett N. Steenbarger
What is the quality of your self-talk while trading? Is it angry and frustrated; negative and defeated? How much of your self-talk is market strategy focused, and how much is self-focused?
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Hot Risk, Frozen Trader
Forex Trading Psychology | Written by Brett N. Steenbarger
Many traders spend considerable time figuring out when and how to enter the market, but put far less effort into determining exits and the amount of capital to risk on their trades. The hitting of your stop losses is triggering a sense of regret.
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Experts, Novices, and Trading Performance
Forex Trading Psychology | Written by Brett N. Steenbarger
A large body of research examines skilled performance in various fields by comparing experts with novices. These fields range from athletics (both team and individual sports) to chess to various performing arts.
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Why Traders Lose Their Discipline
Forex Trading Psychology | Written by Brett N. Steenbarger
When traders lose money, they often attribute the problem to a lapse of discipline. Such a lack of consistency, however, is actually the result of many different problems--not the cause.
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Enjoy the Obstacles
Forex Trading Psychology | Written by Dr. Van K Tharp
In any endeavor in life, you have up and down periods. Dealing with the market has many such up and down periods. In order to profit from the up periods, you have to tolerate or even "enjoy" the down periods. In order to enjoy the profits, you have to got through losses. And perhaps if would be useful if you could actually celebrate your losses.
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Discipline in Forex Trading and Investing
Forex Trading Psychology | Written by Joe Ross
Being disciplined is fully 50% of the job of forex trading or of investing. I don't care how good your trading system is, without the discipline needed to follow the system you don't have much of a chance for success in meeting your goals.
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Disgruntled
Forex Trading Psychology | Written by Joe Ross
You have been faithfully following your trading plan and the rules you've set for trading. By following them you are now in a trade that doesn't look so good. At the same time, by following your trading plan, you see that you've missed a beautiful move in a different market, one that could have made you a lot of money.
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Don't Deny Reality
Forex Trading Psychology | Written by Joe Ross
If you want to be a successful trader, you must make sure you do not deny reality in any phase of your trading. You cannot deny losses, price direction, mistakes you make, being undercapitalized, or a whole host of things you would rather not think about.
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Ways to Acquire Discipline in Forex Trading
Forex Trading Psychology | Written by Joe Ross
Hey Joe! When you were teaching us at our Forex office in Florida, you stressed discipline. Our head trader stresses discipline. What I want to know is if discipline can be acquired or is it just something you are born with? I’m having trouble finding it in myself.
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Repetitive Mistakes
Forex Trading Psychology | Written by Joe Ross
Anyone is allowed to make one mistake. When the same mistake is repeated a second time, caution should be noted. The third repetition of the same mistake constitutes self-destructive habitual behavior that must be reversed.
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The Right Kind of Fear Can Create Success
Forex Trading Psychology | Written by Joe Ross
Your probability of trading success is directly proportional to your belief in your abilities. The greatest reason traders fail is fear. Fear can arise from your lack of belief in your abilities.
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Forex Trading with Optimism or Pessimism?
Forex Trading Psychology | Written by Joe Ross
That is a very interesting question. It would seem than being somewhat pessimistic would cause a trader to take fewer trades and cautiously manage the trades he/she takes. In contrast it would seem that a more optimistic trader would tend to trade more often, taking greater risk.
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The Advantages Of Trading Alone
Forex Trading Psychology | Written by Marquez Comelab
You are free to make your own decisions without having to find a way to explain the rationale of your decisions to anybody else. Your time and effort can be focussed on what the market is doing and how you react to it, instead of worrying about the psychological and emotional dynamics of a trading group.
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Are You Calmed and Relaxed When You Trade?
Forex Trading Psychology | Written by Joe Ross
There have been times when I made mistakes under pressure, but I don't recall ever cracking under pressure. By that I mean I didn't panic, but I have come close. Being short soybeans when Chernobyl blew up was probably the closest.
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How Should A Trader Feel About Losses?
Forex Trading Psychology | Written by Joe Ross
The worst aspect of losing is that it tends to create pessimism. Traders should feel bad when they lose money only if they fought the market trend, or violated their own trading strategies. The best traders have a healthy "so what, big deal!"
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Can You Really Make it as a Trader?
Forex Trading Psychology | Written by Joe Ross
You alone determine whether you will succeed or fail at trading. You alone are in control; take responsibility for your performance and your life. There are always tremendous opportunities in the markets. It is not what happens, it is what you do with what happens that makes the difference between profit and loss.
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Fear of Failing in Trading by Joe Ross
Forex Trading Psychology | Written by Joe Ross
This question was sent to me from one of our students: What if you can't help it, but you are really afraid to fail as a trader. You have put so much into your desire to trade. You have a wall full of books. You have invested most of your money. You don't dare fail now, but you fear you will. How do you deal with your fear of failing?
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Destructive Patterns in Trading
Forex Trading Psychology | Written by Brett N. Steenbarger
Before we get into the topic of destructive trading, allow me to explain how psychologists assess whether or not a person has a problem with alcohol consumption. Here are ten questions that a professional might ask in order to assess any kind of substance use disorder, including alcohol abuse:
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Avoid Making Predictions in the Market
Forex Trading Psychology | Written by Dr. Van K Tharp
Most people make a big deal out of market prediction. They think they need to be right 70% or better in order to "pass" the exam that the market gives them. They also believe that they might get an "A" if they could be right 95% of the time.
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The Miracle of Discipline
Forex Trading Psychology | Written by Rob Booker
I have read just about every trading strategy book out there – and hundreds of self-help books -- and all of them have impacted my life positively. I’m a better trader for having read them. However, for much of my life I struggled with a lack of discipline, and as long as I struggled with discipline, I was always almost successful at whatever I tried.
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Mr Spock. on Forex Trading (trading with emotion)
Forex Trading Psychology | Written by Rob Booker
Do you remember Spock from the television series Star Trek? I do. I remember him because he was always so calm and collected. This guy never seemed to get frazzled. Nothing bothered him.
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Oh, Crap! I just lost all of my money
Forex Trading Psychology | Written by Rob Booker
You probably started trading currency for the same reason I did: to make money. While that’s a worthy goal, and one that you’re likely to reach, it’s just not wise to try and make a year’s worth of profits in one trade.
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How to Regain Your Trading Consistency
Forex Trading Psychology | Written by Brett N. Steenbarger
I was a successful consistent trader who always hit singles and doubles ($1000-$3000 a day) for 48 months in a row without having a losing month (1999-2003).Then one day I struck out.
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Five Guiding Principles of Trading Psychology
Forex Trading Psychology | Written by Brett N. Steenbarger
Trading is a performance activity - This is the core idea behind my most recent book. Like the playing of a concert instrument or the playing of a sport, trading entails the application of knowledge and skills to real time performances.
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Attribution and Bias Among Traders
Forex Trading Psychology | Written by Brett N. Steenbarger
Perhaps the cardinal contribution of behavioral finance research is the elaboration of the ways in which people depart from strict rationality under conditions of risk and uncertainty. How we process information affects our behavior, creating situations in which we can risk our capital more for psychological reasons than for logical ones.
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Trouble Holding On To A Position?
Forex Trading Psychology | Written by James Lee
All traders are guilty of exiting a winning position too quick. We fear the loss of paper profits or perhaps we trade our P&L instead of our charts.
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Assessing Your Personal Strengths: What They Mean for Trading
Forex Trading Psychology | Written by Brett N. Steenbarger
A common perspective is that traders run into problems because of personal (or personality) flaws. My experience with successful traders in professional settings, however, finds that the successful traders often have as many of those shortcomings as other traders.
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Emotions and Forex Trading Don’t Mix
Forex Trading Psychology | Written by David Mclauchlan
The key to making money in the currency exchange market is to avoid emotional decisions and to follow a carefully thought out strategy that takes the current market and history into account. Going with your gut is not the way to go in the Forex market.
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