Trading Psychology
Considering foreign exchange trading as a way of making more money indicates that you are thinking “outside the square”, but unless you have support, the correct money mindset, focus and discipline, failure and the very real aspect of foreign exchange risk is a given. Your psychology will be the most influential factor to your success or failure in foreign currency trading.
Foreign Exchange Trading – Do you have support ?
In many cases you may be “on your own” when it comes to foreign exchange trading. Partners, friends and family may not understand or support your foreign exchange trading venture. This is especially true if your current financial situation requires immediate and/or regular income.
Unless you are able to initially support yourself from other sources, the stress of foreign exchange trading may be overwhelming with the desperate need to make money. Focus on other methods of making money first, however basic, and consider foreign exchange trading as a part time occupation. The foreign currency market is open 24 hours a day.
Foreign Currency Trading - Mindset
You will need to keep a positive mindset and control your emotions when foreign currency trading. Making $10K on an online trade can verge on euphoria, but conversely, losing $10K on an online trade can seem catastrophic. It is essential that you trade forex according to a trading strategy as indicated in “Trading Systems” to avoid emotion.
Spend time “taming your mind” by watching inspirational videos, or attending talks etc. Watch this video, even though you may find the tapping a bit strange, listen to what he is saying.
Foreign Exchange Trading – Maintain Focus
If you are still of the view that foreign exchange trading is a quick and easy way to make money, you simply are not focused. Unless you treat forex trading as a business, maintain focus, and are prepared to spend time (a lot) and money to educate yourself, your forex trading venture is nothing more than gambling.
Foreign Currency Trading – Be part of a “forex factory”
Foreign currency trading can be very lonely occupation as you sit behind a computer terminal all day, isolated from the world. This in itself is enough to make you feel very depressed, despondent and to lose focus. Consider trading as part of a “forex factory”.
A “forex factory” is nothing more than a group of foreign currency traders who link via a forex forum to share forex trading strategies. Unlike share trading, an individual foreign currency trader can’t influence the foreign currency market, and therefore they are more willing to share their forex trading strategy as it does not impact their return.
Apart from alleviating some of the loneliness, you get some insight into the forex trading strategies of other forex traders around the world. One tip is to remain disciplined, and do not get caught up in the hype. A forex trader may claim to be making big money by using forex robots etc. Remember, they may have a vested interest in promoting these forex robots for a commission.
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