In this article i will be taking you on some common and mostly uncommon trading psychology barriers that lead you to losing money.
This big guy is the most common form of bad trading psychology given that most people jump into the FOREX MARKET and expect to turn $10 to $100k under a week its no surprise. Greed makes you over leverage and use lot sizes that are bigger than your account and at the end you blow your first account due to greed. Greed makes you take trades that aren't there
How do you defeat greed? Easy
- Have an abundance mindset
$5.1 trillion exchange hands in the market everyday. There are thousands of opportunities what this means is, that there are endless opportunities for you to make money by following the market you don't have to die on that 1 trade. You can make 500$ and above on one good trade (depending on your lot sizing in relation to your account size) there is no need to rush it.
This guy is the most common devil that takes from traders especially newbie traders
Fear makes you not to take good trades
Fear makes you not to hold on to good trades
Fear makes you panic sell and panic take profit
Simply put fear will never let you as a trader reach. Your full potential because you keep making stupid mistakes because of it.
How do you defeat fear? It's simple
You can't defeat fear you learn to ride it..And you learn how to ride it by having a trading plan before going into any trade and for no reason should you go against your trading plan even if you feel scared and uncomfortable its okay so long as nothing outside your trading plan has occurred .
Don't take that trade. Don't close that trade. Don't take that profit . Let your winners run, with time you become one with the feeling
The BABA of them all. you usually don't encounter this boss until you have started making that Forex money😎. Its a reoccurring boss so be ready to defeat it anytime it shows up. Lets dive into it shall we?
Ego usually comes from the zone after a steady set of winning trades back to back you feel like you have arrived. You have made steady withdrawals everything is good everything is fine. You get relaxed and start taking sloppy trades which for sure you will lose
You get comfortable and Stop putting in the work in your analysis. You are now a master trader if you say the market should turn it turns. But soon enough you start having a losing streak, back to back losses but you refuse to snap outta it because of course you believe you are now a master trader.
You hold on to losing trades why? Because the market will turn and go in your direction because you said so. You are trying to prove to yourself and others than you are always right so you don't do the things you know you need to do out of pride
How do you defeat ego? Here's how
Constantly remind yourself that your 2000$ means nothing in the market and the market will take it from you at any time same way it can easily give it to you. Treat the market like a deity, Because it is. And also always always follow your trading plan not your emotional response
Some extra bad trading psychology includes:
- Feeling like a victim
- Gambler aye
- Tying yourself worth to your trades
- Seeking comfort and certainty in a market of discomfort and uncertainty
- Rejecting your wins subconsciously.
In all you do remember that as a trader you are trading in a market of uncertainty and probability. You only have an edge which is your analysis. If you are constantly seeking for feeling comfortable and certain before trades then you are gonna keep losing and missing trades. You end up feeling like a victim of the market
Remember you are human first and as a human you can't always control your emotions however you can control the actions you take in regards to your emotions. This is why i don't teach people who have a deep negative mindset about trading because on their first encounter with an obstacle they give up easily.