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ARE YOU A HIGH RISK TRADER? |
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It is a core principle in trading that one must keep losses small. Virtually all large losses start out as small losses. Suffering losses that are much larger or more frequent than planned is one of the primary warning signs of a High Risk Trader. You may be a High Risk Trader and not even know it, especially if you have been successful in business.
One client (let's call him Sandy), a former executive at a large software company, took his trading account from $1 million down to $100k in the year before he called me and proceeded to draw it down to $25k before he could get control of his trading. Sandy is smart, creative, confident, tech-savvy, strong-willed, ambitious and very dedicated. In the business world he is a CEO-type, a "peak performer," but that did not help. In fact, it made his trading worse and he was almost uncoachable.
Sandy's mistake was thinking he could apply his natural business skills to trading. They actually worked against him because they led him to focus on the market, not on himself. |
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Forex trading mistake and psychology |
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As for the majority Forex traders, their situation is always on the more disadvantageous side. Limited experiences, most novice Forex traders have to pay large amount of "tuition fee" for Forex trading mistake that they made. The less advance Forex trading tools resulted major Forex traders as the sacrificial victim for those winning Forex traders.
The goal of this Forex site is to reveal the basic reason that leads to majority Forex traders failed. In a sense, Forex traders who making losses in the Forex market aren't actually loser, often certainly is not that they cannot beat the Forex market, but they cannot defeat themselves - in terms of winning against their own psychology. |
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Anything involving winning or losing large sums of money becomes emotionally charged. All right. You’ve heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you’ll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info – if it’s math, there’s only one right answer, right? The answer lies in interpretation. The numbers don’t lie, but your mind does. Your hopes and fears can make you see things that just aren’t there. When you invest in a currency, you’re investing more than just money – you make an emotional investment. Being ‘right’ becomes important. Being ‘wrong’ doesn’t just cost you money when you let yourself be ruled by your emotions – it costs you pride. Why else would you let a loser ride in the hope that it will bounce back? It’s that little thing inside your head that says, “I KNOW I’m right on this, dammit!” Bottom line: You can’t keep emotions out of the picture, but you can learn not to let them control your decisions.To most people, being right is more important than making money. |
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The Psychology of Forex Market Trading |
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When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who’s been in the game for any length of time will tell you that psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind – and understanding the way that psychology moves the market. Studying the psychology of the market is nothing new. It doesn’t take a genius to understand that any arena that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market, though. If you keep your eye on the way that psychology influences others – including the mass psychology of the people that use the currency on a daily basis – but neglect to know what moves you, you’re going to end up hurting your own position. The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Are you saying ‘Huh?” about now? Believe me, I understand. I felt the same way the first time that someone tried to explain how the mind games we play with ourselves influence the trades and decisions that we make. Let me break it down into more manageable pieces for you. |
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Forex trading trends are used in technical analysis, in order to view the general direction of the currency. Trends are identified as uptrend, downtrends and sideway trends. Without the use of trends Forex analysts wouldn't have the ability to predict the direction of the currency price at any given time.
Forex Trading UptrendsAn uptrend is a Forex trading trend that occurs when the general direction of the Forex trading currency you are trading is upward.
Forex uptrend are used by traders to make profits while the trend lasts and until it reverses. The goal of most technical traders is to identify a strong uptrend and to profit from it until it reverses, and with this Forex trading trend strategy, you are able to cut down on unnecessary losses. The best way to use uptrends is to sell the currency once the new peak become lower than the previous peek.
Forex Trading Downtrends A Forex downtrend occurs when the general direction of the Forex currency you are trading is downward.
To use downtrend is similar to uptrend use, you simply monitor the currency chart and notice when one peek becomes higher than the previous peek, indicating a reverse in the Forex trading trend direction. Downtrends are also useful tools to determine potential trading losses
Forex Trading Sideway TrendsThere isn't much to say about sideway trends, except that they are trend stages in between uptrends and downtrends. Sideway trends usually do not tell much about the currency situation, even though they can hint on a nearing reversal in the trend direction. These are Forex trading trends that are less frequent but still give important information for the online trader.
Now that you've learned all there is to know about Forex trading trends, go on and see how you can use it in the actual Forex trading market. |
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