Mental is a capital in Forex trading
Some time ago I wrote an article entitled “Calculating-Calculating Forex Trading Capital” . In the article discussed is how much capital (money) is actually needed to be able to trade forex comfortably.
Well, this time the capital will also be discussed, but not in the form of money but in a mental form. The term, “psychological capital”.
Why is this important?
You see. Every time a trader can’t stand it anymore and chooses to give up because he is repeatedly hit by a loss, usually it is not because the money is already gone. In fact, it is his enthusiasm that has vanished.This is what causes them to stop. Their “psychological capital” has run out.
The greater the capital used for trading, the greater the psychological burden that must be borne by a trader. Therefore, your “psychological capital” must be equally strong.
The psychological strength of a trader can be seen from his ability to survive (mentally, of course) of the many psychological effects that are commonly experienced by being a trader. Simply, the mental quality of a trader will be seen from how he reacts when he experiences a loss (or gains). Is there a bad effect or not.
Having a loss and making a profit, if you are not careful, will have the same negative impact on your trading quality.
For example, a trader who happens to have just made a profit several times in a row. In such conditions, he is vulnerable to being arrogant and greedy. The experience of successive profits causes a large head so that in subsequent transactions he does not want to use stop loss properly, or double the volume of transactions.
On the other hand, the mentality of successive traders being knocked down by losses can also collapse. He could then lose confidence and refuse to evaluate the trading strategies he uses because he believes that the strategy is useless.
As a trader, you are not only obliged to increase capital money but also strengthen mentally. You must learn how to strengthen mentally through the trading experience, whether it’s sweet or bitter, loss or profit.
When you experience a loss, no matter how much, don’t let the loss affect your mentality when making the next transaction. You must really be able to see that each transaction is a different transaction. The term child now: move on. If not, you will be forever haunted by the actual losses that have passed.
Conversely, when you have just tasted a profit, it is important for you to continue to treat the transaction as a transaction that allows loss. Then there is no reason to feel angry and ignore any risks that might arise.
This mental balance is just as important as strengthening your forex trading money , because it is mental strength that makes you able to survive in all conditions.