The human brain plays a significant role in determining the winner in currency trading. Do not believe it? Read this post from first to last and you will find many psychological aspects play an important role in our strategy. Although people will not admit it this is the truth. The professionals always tell us to start analyzing with a calm mind. Do you think it is only for showing they care for their subscribers? Reports have shown brain can efficiently and accurately analyze the correct trends if it is in a stable condition. Many other benefits directly contribute to a productive outcome. The mind is the ultimate weapon that can be used to achieve the dream. If used correctly, it can provide you an edge over the other investors and can make the dream come true.
Greed and Fear
Perhaps the most controversial psychological aspects are greed and fear. Many will straightforwardly ignore their ever greed but that is not the truth. It has been found that majority of failures are due to an excess of greed. This is so destructive that even a planned order can fail if not controlled at the right time. It is best to close trades as soon as they have reached maturity but if greed prevails, it makes you keep the trade open for a longer period. It may seem logical because as the trend is in a favorable direction, why not take as much profit away as possible? The real problem comes when there is sudden volatile movement. This movement is not sudden but as we have agreed on our controlling positions and therefore this comes to us as a surprise.
Fear is another thing that prevents us from placing a trade at the right time. If investors can somehow learn to overcome greed, they now have to overcome fear. It is much harder as no-one wants to lose money. These two psychological aspects always play the tug of war in mind and confuse the brain. Before investing real money, try to win over these two most controversial aspects of mind. Once fear and greed are both conquered, everything will be logically productive.
Accepting the losses
The top stock traders at Saxo always accept the loss with a big smile. They never take too much risk because they know they have to deal with the losses. In order to survive at the trading business, you have to follow the core concept of trading. After you develop the skills of taking trades with low risk, you will gain the ability to make money without having any trouble. Train your mind properly so that you can accept the losses without having any issues. Focus on the core concepts of trading so that you don’t have to lose too much money.
Working vs. copy-paste technique
Every person wants to be a free rider in the Forex. All want to have the same piece of tasty cake but nobody is willing to bake! Developing a strategy from scratch is a time-consuming and very arduous task. It takes a lot of time to rectify the errors and make it market-ready but there is no shortcut. Smart investors try to look out for copy-paste techniques and this is how they get slaughtered. At first, it seems to work well but slowly it falls apart. It is the common tendency of people to avoid work and reap the benefit but in currency trading, this is not going to work. Make up your mind whether to work diligently or simply be a thief and try to steal other peoples’ formulas.
Instant vs. long-term profit
Long-term trades are much profitable but they also require more dedication and time spent on them. Traders struggle to choose between the right timeframe in their careers. Make up your mind whether you are going to become a scalper or a long-term trader. This will significantly impact the results.