Forex Traders Psychology [ The 4 Enemies for Trading Mindset]
Emotions and Trading? Main 4 psychological incentives
Trading psychology is an important aspect of stocks, Forex or any other security in trading. In fact, the psychology of trading speaks to the importance of most trading knowledge skills, and market conditions for successful trading.
Trading psychology is the basis of traders' thinking and process, decision-making skills, and decision management. According to this definition, the more heartfelt traders act, the higher their profits or the less they lose.
Psychological incentives may be different for traders, but there are also some universal effects that determine how people trade. The main incentives are:
Let's talk about these key factors:
Greed - Trade does not really like greed. If you make your decisions and steps greedily, you will not gain much or lose. Another reason for greed is not making a profit, and traders can be even more stingy if they don't make a profit. It is clear that, in the beginning, traders are very stingy when it comes to taking risks in trading. The main point here is that we need to take more careful steps than greed.
Fear - Traders are usually afraid to enter the market when they are new to the trade and have not fully mastered every area of trading, in which case it is recommended that they do not trade much real money. Another reason is for traders who lose a lot. They can also be frightened when a trader loses several times in a row or loses more than they anticipate. In order to overcome market fears, traders must first know that they will never lose a certain amount of money above the agreed price in trading. Fear can be a deterrent for traders, as they can miss out on great, important chances when they are scared. It is clear that a lot of experience is needed to balance fear and greed.
Impatience - Of course, it is always difficult to make high profits when you trade. The most important nuance is to give yourself time and patience to focus fully and make high profits on the steps you take. If a trader cuts too fast, he may miss out on the biggest opportunity he can get.
Anger - All of these are normal human feelings. Although these sometimes affect us negatively, it is, of course, impossible to completely reduce these feelings to zero.
When it comes to anger, it is one of the growing feelings of our emotional structure. Traders are more prone to anger when market actions go against the trader and cause them to lose. This, in turn, can negatively affect traders' perceptions of market development.
If traders are afraid, they can take a series of steps, such as cancelling all trading funds and not opening new positions, which could give them a real opportunity. When traders get angry after a loss, the market tends to make hasty decisions that clearly do not fit their position.
How do you train trading psychology?
No matter how big the trader is, no matter how strong his emotions are, it is not easy to get out of the equations when trading. This is because everything people do depends on their emotions. Therefore, if a person tries to recognize emotions instead of ignoring them, he can be more successful in any field. Expanding the psychology of trade allows you to make business decisions without being affected by emotions. The main thing is not to stifle the emotions of traders, but to live them and make the right decision.
How do you master trade psychology books? [Top 5 psychology books for traders]
A strong strategy in the field of trade, as well as steps in psychology, is a very important nuance. Even if the trader chooses the most successful strategy without acting mentally to act according to the plan, he will not be able to achieve complete success. Successful traders not only develop and master the strategy, but also get to know themselves, their characteristics and feelings better, and grow them so that they can achieve more successful results in implementing their strategies.
Traders should also read additional materials to further expand their trading thinking. The daily trading psychology books we have selected for you contain very different, extensive and useful information and recommendations for traders. The list you see is a very useful, comprehensive collection of information relevant to your trading and daily life skills. They collect diverse, comprehensive, practical information aimed at improving the daily trading psychology, understanding what it takes to be a successful trader, and delivering it to traders in the most appropriate way.
Here is a list of the best commercial psychology books available for free:
- Flow: The Psychology of Optimal Experience – Mihaly Csikszentmihalyi
- Trading in the Zone – Mark Douglas
- The Psychology of Trading – Brett Steenbarger
- Market Wizards – Jack Schwager
- Reminiscences of a Stock Operator – Edwin Lefevre
Is Forex Trading Addictive?
Trading in financial markets is considered to be extremely exciting, attractive and stimulating. However, players can become addicted to them. Even if they are not completely addicted when a trader tries to recoup several times the amount he lost when trading, this is a special place in their minds. Traders are starting to spend more time trading and not getting addicted. At the same time, if he does not focus on trading, but invests more and more money in trading, the risk of losing it increases.
Considering other nuances, we see that in addition to losses, there can be changes in a person. Disappointment and aggression because of the loss, as well as trying to prevent personal problems, can lead a trader to further losses. Another nuance is that a trader who is trying to earn more in return for what he has lost can borrow or borrow for it. This is a factor that costs him twice as much.