Forex Trading Is In The Mind

How you think is how you trade.

Trades are won and lost in our heads, not on our laptops. The psychology of the market, trader emotions and mental discipline are, along with money management  the key to Forex success. It’s about developing the trader mindset, and then applying that to an excellent methodology. After all, learning to trade Forex is a new life skill.

mindWe have to change our psychological makeup in order to succeed in Forex trading.

There are two main ingredients when it comes to trader psychology; one is knowing what to do and the other is actually doing it (the taking action part). Having the best trading methodology in the world is meaningless unless you can press the buy/sell button and put your money at risk without hesitation when required to do so. It is one thing to understand how to act in a given situation but quite another to actually go through with it.

Just having the theory of trading is no match to the actual hands-on experience of live trading. What many people don’t understand is that theory does not explain how you will react to certain events while you are risking real money in the markets.

This is why I hate demo accounts!  They completely remove psychology from the learning experience.

This may surprise you, but I truly believe Forex trading to be 75% psychology and just 25% methodology. This means trading is really about who we are. If you seriously want to know who you are, warts and all, then trading will help you find out.

We are all very much products of who we are and where we came from. To survive in the Forex market you may have to overcome some obstacles from your childhood or background. Maybe at an early age your parents may have said to you, “Keep away from financial markets you will lose your money.” Over the years this will have embedded itself into your subconscious, ready to re-emerge when you trade.

A favorite saying of my parents was “money is the root of all evil,” which made me believe for a long time that making money was bad, and this kind of deep subconscious belief can sabotage your trading. We all have these limiting beliefs and sooner or later we have to confront them.

3 comments

  1. Well put, sir, well put. I’ll creitalny make note of that.

  2. There are no words to describe how bodcaious this is.

  3. Hey I sent you email on your yahoo email and Facebook page 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *