Some aspects of psychology that traders must know in order to succeed in forex trading

Do you think Forex trading will bring quick profits? If yes, take the eraser and remove the thought from your head.

There is no instant advantage in this world. On the contrary, Forex trading is actually a very risky business, and we must make many efforts to control the risk element.

To be able to trade forex independently, it takes a deep knowledge of the mechanism of trading and forex analysis. If these knowledges have been mastered, then we can decide to trade forex.

However, the success of a trader is not only supported by knowledge, but also determined by the mentality and mindset during trading. 

This is the aspect of forex psychology that needs beginner traders to know. 

There are several aspects of psychology that a trader must know, namely:

  • Forex Trading Needs a Lot of Practice.
  • Don't hope to be rich with too small capital (Although it can be but the risk is high).
  • Aware of Potential Losses.
  • Sustainable Mental Care.

Now that's the psychological aspect that traders must know (especially those who are still beginners like me). For the explanation, let's discuss one by one below:

  • Forex Trading Needs a Lot of Practice

Just because forex involves a lot of money, don't think all forex traders around the world can make profits just by clicking the mouse.

As stated earlier, only about 10% of traders are able to make large profits. How are we to be among the 10% of successful traders, not among 90% of traders failing? Practice nonstop and keep learning.

Many people misinterpret and think they will be able to reap huge profits overnight. Well... okay, we can indeed make big profits with Forex trading.

However, large profits will always be accompanied by equally great risks.

"There is one thing that is not understood by novice traders or those who are new to forex: the profit is not necessarily generated in a short time."

"To be able to profit, we must maintain a high level of discipline, such as the candidates for Miss Universe who are desperately managing and dressing up to look perfect."

"This kind of hard will be what we must have."

In reality, often large losses are caused by these four things:

1. Don't have a trading plan.

Well, we definitely have a goal to get big profits. But that is not a plan. The trading plan here not only contains trading objectives, but also the strategies and steps we will take to make the trading run smoothly.

2. Less training on a demo account.

Even though it's trivial, but trading practice on a demo account is one of the most important things so that we become reliable traders.

Remember in films about heroes? Hercules, Superman, Spiderman ... Before becoming superheroes, they all trained hard. Practice swords, martial arts, lifting weights, falling awake sweaty!

Where are we? All we need to do is practice on a demo account for several months, before being ready for action on live trading.

3. Undisciplined.

Not only school children who need discipline, forex traders too. Discipline follows the strategy in the trading plan that has been made.

Discipline regulates the capital that we have. Discipline is one of the absolute things in the world of trading.

Without discipline, we will often suffer losses. We certainly don't want this to happen, right?

4. Poor management of capital.

Just like other investments and investments, when trading Forex, we are required to have a Money Management system.

By having good Money Management, we will be able to control the risks of Forex trading trading.

What kind of money management is good? well, this is relative, depending on how much our capital, whether we dare to take risks or not, and how our trading strategy.

However, don't worry, we can test Money Management on a demo account.

  • Don't hope to be rich with too small capital (Although it can be but the risk is high).

Did you know that there was people who can't trade? Although everyone can and can participate in Forex trading, in practice, not everyone, is advised to pursue this field.

Especially those included in the one below:

a. Unemployed.
b. Low income.
c. Immersed in a puddle of debt.
d. Unable to pay electricity bills or fulfill life needs.

The main reason why they are prohibited from entering forex trading is because the minimum capital for successful trading is 500 USD (on a mini/micro account), and that won't necessarily be direct profit.

Remember point one above. Do not expect to get rich right away with just change capital.

  •  Aware of Potential Losses

Before starting forex trading, you must understand that all forex traders must have lost. Yes, I mean ALL.

The word is intentionally written in the form of capital so that we remember: a loss we cannot avoid in life, including in forex trading which is famous for the lure of lucrative profits.

If you only listen to marketing broker promos, then trading sounds very easy. Who is not interested in making money just by sitting watching the graph movements? Moreover, here we talk about money in millions, sometimes even more.

Unfortunately, one thing that the promos did not convey: before getting a big profit, we must taste the loss first.

In fact, according to many research results (one of them, the results of the French forex regulator AMF), 90% of traders must lose and lose their capital.

Also, if you ask any trader, no matter how successful he is at the moment, he must have lost money.

"It's so commonplace to lose, there are even traders who say, to be able to succeed in trading, you should have felt a loss first."

"Therefore, if you hate to defeat or are afraid of losing, it's better not to trade forex. Yourself with the rhythm of forex trading which sometimes moves unexpectedly."

  • Sustainable Mental Care

We cannot trade in a short period of time and hope to make a direct profit. So, if you still want to continue trading, we must be willing and able to continue to patiently practice and learn. "Then what about those who can make big profits with Forex trading?"

Usually, they are traders who are pro with a good trading strategy and have eaten a lot of acid-salt in the world of Forex trading, so being accustomed to facing big risks that can make our hearts stiff just by looking.

They can still experience occasional loss; it's just that the profits earned far outweigh the losses suffered. Well, for those of us who have just learned to trade, it's better to do it slowly, because Forex trading is not a skill we can master at a glance.

Well, for those of us who have just learned to trade, it's better to do it slowly, because Forex trading is not a skill we can master at a glance. Check out the various forex trading lessons while practicing trading on a demo account.

Then, it's good to also remember the following things to maintain our respective forex psychology:

Do forex trading, only if you feel able to bear losses.

Forex trading is a type of investment that has a relatively large risk (high risk, high return). Therefore, do trading with idle funds that will not make you experience a financial crisis and cannot eat if there is a loss.

Don't put all money in one trading position.

Placing all money in one trading position is an act that is very stupid and risky, because it has the potential to make us lose all our money in an instant.

Don't trade in too many currencies.

Concentrate and focus on just a little or some foreign exchange. Too much foreign exchange traded can make it difficult for us to monitor the development of price positions, because the more information we have to look for.

Practice walking before running.

Don't trade before fully understanding how to trade. Understanding and learning to trade through foreign exchange sites that provide a place for forex demonstrations or games is a must-do before actually trading.

Accept the fact that "the market is always right."

The market is not a collection of ducks that can be easily led by one or several people. "The market will go where it wants to go," said the Englishman.

We are just small forex traders, who will not be able to dictate the market. So, don't be too frustrated when it turns out that the trading position that was opened was wrong and forced to lose.

Every now and then, there's nothing wrong with succumbing.

If you are in a position that continues to lose money, get out of the market immediately.

It may be that the market conditions are not in accordance with your trading strategy or your mood is not good. Wait until another opportunity comes to be able to win.

Maintain a healthy mind and body.

Forex trading is an activity that takes a lot of energy and mind. Therefore, if the principle of "time is money" so, it's taken as a handle, maintaining health conditions is a must.

Don't be too greedy and greedy again.

If the profit target has been reached, stop for a while until there is another profitable opportunity to trade again.

Avoid greedy properties that will backfire for ourselves, because the market does not always side with us.

So at a glance review of forex psychology. Hopefully the article above can help you to achieve success in trading, especially by controlling the psychological aspects within you.

Hopefully with  practice and learn mentally, we can develop and go to the peak of success.