Trading Psychology: The Things Nobody Talks About

Trading success stands on four fundamental pillars: knowledge, experience, psychology, and luck.

In this blog, we are going to talk about the psychological aspects of trading. To be more exact, we are going to dive into some of the lesser-known (and incredibly important) aspects of psychology in trading.

There are several commonly know physiological obstacles in trading that are plastered all over the internet in the form of blog posts, educational websites, or Youtube videos.

Ultimately they come down to the emotions of fear and greed. Understand these and you’ll understand how mass-market participants think.

Fear and Greed in Trading

Fear is probably the most common emotion for traders and investors. Usually, traders are afraid of missing out on a trade. All traders and investors feel fear at some level, from time to time.

Many traders struggle with uncertainty and fear, that as a result can demobilize you from applying your hard-learned technical skills.

Here are types of fears traders have to face every day:

  • Fear of losing accumulated profits.
  • Taking profit too early or trailing stop loss too tightly.
  • Trading with stop losses that are too tight.
  • Fear of losing money or being wrong.
  • Moving stop loss further away from the price in the hope the price will move in your favor.
  • Taking too much risk or too large a position size.
  • Trading too frequently – this is directly linked to fear of missing out.
  • Jumping into trading before you’re educated and ready.

How to Overcome Fear and  Greed

As a trader, you must move from a fearful mindset to a mental state of confidence and serenity of mind.

You will have to work past these emotions by repetitively implementing a proven probability edge in the market.   Well, this may not sound easy, but there is a way to stop mixing your trading and emotions.  First, you have to believe in your ability to execute every trade. Thus, you’ll have to calm down and try to separate your emotions. Once you have your trading plan, a proven mechanical strategy and routine in place, you’re on the right path.

Here’s what you have to do:

  • Set goals around implementing your trading plan.
  • Keep it as mechanical and consistent as possible.
  • Work on developing your patience and discipline.
  • Make your trading process a habit.
  • Diminish any type of self-sabotaging behavior.
  • Focus on your process, rather than the money
  • Once you have the process executed in a non-emotional way, the money will come in time.

Reprogram Yourself and Your Subconscious Mind

If deep down you don’t have belief in yourself and your trading you’ll unconsciously self-sabotage. Now you know you’re a profitable trader. As soon as you’ve put in the work to prove your trading strategy is profitable your belief system begins to change.

From this belief, your conscious and subconscious mind works in harmony to execute your trading edge towards your goals. No more self sabotage!

On the flip side, some arrogant newbies think they can leave the rate race because of trading within a few weeks. This isn’t belief in something real, this is a delusion. You still have to put in the work and be patient.

Trading Psychology and Belief Systems

Ever wonder why truly confident people consistently seem to win at life? It’s because deep down they believe they can achieve.

Newbie traders usually don’t have a proven strategy with statistically relevant backtesting results, thus they don’t know whether their strategy will work or not. Without proof, there is no self-belief. Backtesting gives you data on potential trading strategies. This means you won’t look for another method as soon as you take a few losing trades. Backtesting gives statistics, and statistics don’t lie!

What Should You Do – Final Thoughts

The ultimate goal to conquer your fears and greed is to reprogram your subconscious mind. You will win as you conquer your major fears. First make sure to start by testing your strategies, step-by-step.  Or you can always invest in a mentor who already has experience with dealing with fear and emotions.

Create some process-oriented goals, as well as mechanical trading plans with rules to follow. Finally, discipline yourself! Most importantly, don’t lose hope and have confidence in your trading. As long as you are diligent enough to become a better version of yourself, you’ll start to develop a deep belief in yourself and your strategy’s lucrative performance!

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I     Advantages of the Forex Market            3
II    Basic Forex Concepts                              8
III   Orders in the Forex Market                     13
IV   Game Plan for Successful Trading       18
V    Beginner Trading Strategies                   25

Chapter 1:


1.1. What Is The Forex Market?

The Forex market is a place in which investors are allowed to trade foreign currencies in a given trading period. It is considered to be the world’s largest market with a daily output of 3 trillion US dollars.

The value of currencies is constantly changing every minute throughout the day, depending on the supply and demand levels. Therefore, the market is open twenty-four hours a day five days a week.

Compared to other financial mediums, the Forex market provides better security in the world of investment.

The concept of Forex trading is similar to the regular market, where participants buy and sell goods. In the Forex market, traders are buying and selling foreign currencies. There are over 100 currency pairs available in the financial markets.

There is a uniform currency exchange rate used in the global financial markets. Whatever exchange rate is used in New York, it will be the same exchange rate used in other countries.

The Forex market involves an international network of computers and brokers from all over the world.

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