Winning on the Forex market is a matter of the mind rather than mind over matter. Psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind – and understanding the way that psychology moves the market.
Studying the psychology of the market is nothing new. Any situation that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market.The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Let's try to explain how the mind games we play with ourselves influence the trades and decisions that we make.
Anything to do with winning or losing large sums of money becomes emotionally charged.
All right. You’ve heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you’ll come out ahead. Not necessarily! The numbers don’t lie, but your mind does. Your hopes and fears can make you see things that just aren’t there. You make an emotional investment when you invest in a currency. Being ‘right’ becomes important. Being ‘wrong’ doesn’t just cost you money when you let yourself be ruled by your emotions, it costs you pride. Why else would you let a loser ride in the hope that it will bounce right back?
You can’t keep emotions out of the picture, but you can learn not to let them control your decisions.
Being right is more important than making money to many people.
