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asiaforexmentor

Mastering Your Emotions for Efficient Forex Trading.

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Forex Trading Psychology – Mastering your emotions for efficient Forex Trading

 

 

A lot of people lose money in Forex Trading because they fail to master their emotions. Many books have been written on tips for better trading, but even so, no two people using the same trading methods come up with the same results. How come? Yet every trader has at some point attended a workshop, courses and mentorship programs aimed at enabling traders make more money. But despite all these, very few people succeed. The question is, why?

Forex Trading Psychology

 

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.

The moment you cannot control your emotions, irrational decision making sets in, and even though you might be an experienced trader, you lose money in situations you would have fared better. Psychology can mean the difference between profits and losses. Your state of mind is crucial in Forex Trading, as you make decisions on a sixth sense and fast.

But how do you go about controlling your mind and taking charge of successful trading for maximum profits? Here are some tips to start you off:

• You can begin by making use of stop loss and taking profit prices to reign in your trade. What this does is give you the opportunity to place the trade and halt any deals with it. The overall effect is experience, for the more you deal with a trade, the more it becomes engrained in your mind.

• Once you have placed a stop loss, walk away. Do not wait to see how the trade turns out. Most traders place a stop loss and then wait around to see what happens. It beats the whole point of stop loss in the first place. Being there means you are planning to interfere with trading midway, and you don’t want to do that. So walk away!

• Another tactic is to employ low leverages. Super high leverages may seem attractive because of the higher profits, but be careful because they carry the potential for heavy losses as well. Plus if in such a situation, the uncertainty that comes with it can lead to trading anxiety, and subsequently poor trading decisions. So keep the leverages low until such a time when you are confident you have the psychological control necessary for high leverages.

• Make use of proven methods of trading, those you are sure about. There is nothing as dangerous in trading as using a method you are not sure of. Proper and efficient trading methods help you relax and stay a bit calmer, as the uncertainty is somehow eradicated.

Whatever you do, watch out for your psychology. It works to your advantage if you can work on your mental fitness and stay in control.

Forex Trading Psychology is one of the MOST IMPORTANT thing to master when it comes to forex trading. This is something which we teach in our AFM Winning Forex Course

See you on the other side my friend,

Asia Forex Mentor

Ezekiel Chew

Asia #1 Forex Mentor

Image.jpg.488a576504b62bfefb3614953d169155.jpg

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Once you have placed a stop loss, walk away. Do not wait to see how the trade turns out. Most traders place a stop loss and then wait around to see what happens. It beats the whole point of stop loss in the first place. Being there means you are planning to interfere with trading midway, and you don’t want to do that. So walk away!

 

I like this point. This is something I utilized that really helped me stay calm and objective while the trade was just starting out. I use a smaller first target on half of my position and since each trade has an initial stop loss once I get a fill I will either have a first target hit or a stop loss hit.

 

There was no judgement needed in between. Sometimes I would decide to exit early before one of the two were hit and it always worked out against me. Leaving the two alone and letting the trade work was incredibly important because once I get that first target hit the trade typically would continue in my favor.

 

Once I get in a trade, I use that time to get up an stretch or use the restroom. It may seem silly, but that trick really helped build my patience over the years.

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What is described here is external discipline - an essential element in trading. And it is good advice - if a person could only snap their fingers and change their beliefs when engaged with uncertainty, most traders I know would be successful. To make external discipline work, internal discipline has to be built into the psychology of the person -- if they did not come equipped with it as standard psychological issue at birth. It is the triggering of uncertainty morphing into fear that creates the irrational thinking that keeps people stuck in self limiting trading patterns (like dealing impartially with their stops). Until this element is resolved, external discipline by itself will be undone by learned patterns of fear being exposed in the process of trading. This also tends to be one of the last things that a trader is willing to do.

 

Rande Howell

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Rande,

Where you been?

Thought you had give up on us

or

died

or

finally realized that Bruce Krasting: New Study – Traders are worse than Psychopaths

 

:)

 

How’s the new book coming?

 

zdo

 

zdo

Thanks for asking. The rumors of my demise are premature. To tell you the truth, I simply haven't found much that I could contribute to for awhile on TL. The conversations in the Trader Psychology section did not seem focused on the psychological aspects of trading. Writing and speaking schedule, clients, webinars, and building affiliations have keep me busy. Lots of solid feeback on the book. I'll added a section on Memory Enrichment in the ebook as a tool for developing the internal resources of the trader. I have found that it is a more effective way for traders to build strength and manage emotional state rather than the symbolic representation I've used in the past. Together, they help build a mental model for peak performance that is easier to grasp and learn. I'll be speaking in Chicago in October, Wall St and Las Vegas in November, and Charlotte, NC in December - so I'm going to traveling a bit.

Would you be interested in attending my 4 session webinar course for free? Let me know. I have a couple of scholarships available.

 

By the way, I looked at the study about psychopaths and traders. I have found that there is a vast difference from Wall St types and the folks who actively trade for themselves. The traders in this market tend to be decent people trying to build a life for themselves and their families. Very different than what is found in a trading room on Wall St.

 

Rande Howell

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Rande you remind me a lot of Van Tharp, great content. Thanks for sharing.

 

I get that alot. I really don't know much about the process he uses. Fundamentally, my position is that psychological learning and change occurs when the neuro-circuitry, the biology of the brain, is re-wired into new patterns of perception. Until that happens, change may be sweet, but it is short term. Kinda like diets. People can lose weight short term, but they gain it back because they don't do the work of changing belief and adaptation to stress at the neural pathway level. If this element is not accounted for in a change process, the old ways will widdle themselves back into the performance psychology of the person. There is no AHA MOMENT and life changes for ever. There is a moment of possibility for change that has to be make into a habit. And that new habit has to be practiced just like any other skill set. That's the work of long term change.

 

You're in Chicago. I'd love to have the opportunity of meeting you. I will be speaking at the Options Industry Council's seminar in Chacago on October 22. I see you're into Emini's and don't know if you trade and teach options. But if your coming to the event, would love to meet you and see how we might work together.

 

Rande Howell

www.tradersstateofmind.com

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I didn't really find much useful info at that link. I actually tried following leads to other places, but didn't find much of anything explaining the study.

 

Tradewinds, Nor did I…it started as a funny. I think Krasting was just having some fun too.

But seriously - while Rande made a good point differentiating 'family guys' from 'wall streeters' (broad stroke generalizations of course), I have found I do my best trading when I stop to consciously click into a ‘predator vs predator’ identity and state…

also, I always trade in my office and never trade from home / ie I have also had to put considerable work into clicking back out the instant I leave the office and not carrying those energies into our home, etc.

 

 

Have a great weekend all.

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Tradewinds, Nor did I…it started as a funny. I think Krasting was just having some fun too.

 

Yes, the first thing I did was laugh when I saw that. And in a sense I kind of take pride in being different and doing something that most people wouldn't do.

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