The Psychology of Becoming a Profitable Forex Trader
In this article, we want to talk about the big role that psychology plays for one to become a successful and profitable trader. Psychology involves the mind of the trader, which means that right mindset for a trader produces positive outcome while trading. What you must understand is that psychology can either build or shatter your trading business forever.
Any Forex trader undergoes four stages psychologically
First Stage – The Novice Stage
During this stage, the trader is new to Forex business and is still surviving with trade environment locating his bearing and nothing really matters except the core concepts of survival.
Second Stage – The Conscious Stage
The trading truths dawn on the trader and he/she becomes conscious of the forces at play then initiate steps to gather all necessary informative instruction material. Consciousness makes us develop a constructive Forex trading plan and rules that we develop our business on for success. An alert trader will understand that the market is dynamic, and only a rightfully poised mindset will differentiate success from failure.
This is true because the trading market is an environment that cannot be manipulated by social characters such as wrath, resentment or misfortune. Always remember that we are the determining factor our emotions cannot change the trading environment in our favor.
Third Stage – Transparency and Freedom
This is a stage where as a trader we form a belief that all things work well for those who believe in openness and freedom. We stop being stringent and manipulative and let everything fall in its place while at the same time being in charge of our emotions using it to our advantage.
Notice that the trader in third stage is one that has gained lots of insight into trends of the market comes to a conclusion that participating in market activities is not reflex action but a choice of well calculated moves which convert into profits.
Fourth Stage – Maturity Stage
The transformation of the trader is enormous having undergone major psychological changes and learned that trade environment can squarely give positive and negative returns based on traders’ mindset. The trader is now able to have full control of his intuitions during trading activities that drive adrenaline down the spine.
This stage requires that the trader ensures that his feelings help him to determine the feelings of the herd as well because it is the best way to predict the behavior of the herd in general. By doing this, you will always be on the winning end of the trading market and never will you place your bet on the wrong stock market. Hurrah, you have learned the psychology of forex trading what remains though is to implement and repeatedly apply, guess what they sky will not be the limit.
Consider the factors that are at play and never close your eyes from seeing both sides since you are acting as an individual and not as a group.