Six Tips on Trading Psychology
Trading can we think of as an art that always involves emotions. It could be a trader who has a high IQ that does not control his emotions then his trading becomes unsuccessful. On the contrary traders who have standard IQ naturally mature in controlling his emotions, trading can achieve success.
Lots of traders who fail because of this psychological factor. For the following six trading psychology tips that are useful for your trading continuity.
Mind, Method and Capital
All three must be harmonious, harmonious and balanced. Thoughts are closely related to psychological factors such as emotions, including in the application of risk management. Methods relate to strategy, trading system and market analysis. Capital? This is most important because it may even be trading with not enough money, right?
Imagine if you have a lot of money, in your trading ignore the analysis let alone risk management. Or if you have a good trading system, there is no funds to run it.
Plan your Trading and Execute
Plan everything. To be a successful trader, the first rule we must obey is our own trading plan (trading plan). The key is discipline. If our trading plan says we have to get out of the market, do it. Do not haggle. Violate our own trading plan in the beginning of failure in trading.
Do not be afraid, just do it
Fear in man is common. But the exaggerated fear to execute our trading system precisely prevents us to get a profit opportunity.
How about loss? There are not people who lose money. Keep in mind that risk is an inseparable part of business. Overcome your fear of risk by applying risk management and Risk to Reward Ratio (RRR) is good. We have the knowledge, why not applied?
Do not be greedy
This we often hear when we are trading: Do not be greedy! If our profit target is achieved, we should immediately get out of the market. Often traders are trapped in price movements because they are eager to catch “big fish”. For example, when the profit target is achieved and the position is closed, the price continues to move. If the position is closed, the resulting profit should be greater. Finally, the trader tries to follow the movement of the market by opening the position for a while in a hurry.
It’s good we calm down first after closing our position, either during profit or loss, so the decisions we take is not a hasty decision and emotional.
Do not OverTrade
It is not necessary to punish all your funds in a single transaction. Although it has a great chance if the profit but this is not wise because there is still a big risk lurking. Stick to your trading plan and money management. Remember that the violation of trading plan is the beginning of failure in trading.
The term Cut your losses early, Let your profits run can be a guide but do not be tired. After all you are as little as possible, and let your profits continue to run towards the target. Lots of traders do the opposite. They can survive by allowing losing positions to hundreds of pips, even when new profits are only a pips of confusion ıngіn apun close position.
Once someone asked, “Can I use instinct in trading?” Intuition in trading is good or bad? This is an interesting question.
Let’s differentiate “instinct” with “intuition”. This instinct arises naturally, but there must be a learning process. For example, bees know how to make a strong nest but have to study in architecture. Well, since “intuition” is more gained by learning and from experience. For example, for those of us who are accustomed to driving, know if we have to step on the clutch, change gears, put pressure on the gas pedal, some big corners are needed to turn, even braked suddenly in emergency situations.
In trading, which is more trusted than intuition rather than instinct. The intuition of a trader is formed from years of experience observing and recognizing price movements. Sometimes he knows when the price will move only with a cursory look at the graph. However, it is not recommended to just rely on intuition without the support of objective analysis that supports.
Such are the Six Tips on Trading Psychology that must be owned in Forex Trading. Sеmоgа bіѕа useful for those who just started Forex Trading or is wrestling in the world of Forex Trading.