| When it comes to trading on the Forex market, winning | | | | in a currency, you're investing more than just money - |
| is a matter of the mind rather than mind over matter. | | | | you make an emotional investment. Being 'right' |
| Any trader who's been in the game for any length of | | | | becomes important. Being 'wrong' doesn't just cost you |
| time will tell you that psychology has a lot to do with | | | | money when you let yourself be ruled by your |
| both your own performance on the trading floor and | | | | emotions - it costs you pride. Why else would you let a |
| with the way that the market is moving. Playing a | | | | loser ride in the hope that it will bounce back? It's that |
| winning hand depends on knowing your own mind - | | | | little thing inside your head that says, "I KNOW I'm right |
| and understanding the way that psychology moves | | | | on this, dammit!" |
| the market. | | | | Bottom line: You can't keep emotions out of the |
| Studying the psychology of the market is nothing new. | | | | picture, but you can learn not to let them control your |
| It doesn't take a genius to understand that any arena | | | | decisions. |
| that rides and falls on decisions made by people is | | | | To most people, being right is more important than |
| going to be heavily influenced by the minds of people. | | | | making money. |
| Few people take into account all the various levels of | | | | Here's the deal. The way to make real money in the |
| mind games that motivate the market, though. If you | | | | forex market is to cut your losses short and let your |
| keep your eye on the way that psychology influences | | | | winners ride. In order to do that, you have GOT to |
| others - including the mass psychology of the people | | | | accept that some of your trades are going to lose, cut |
| that use the currency on a daily basis - but neglect to | | | | them loose and move on to another trade. You've got |
| know what moves you, you're going to end up hurting | | | | to accept that picking a loser is NOT an indication of |
| your own position. The best Forex coaches will tell you | | | | your self-worth, it's not a reflection on who you are. It's |
| that before you can really become a successful | | | | simply a loss, and the best way to deal with it is to |
| trader, you have to know yourself and the triggers that | | | | stop losing money by moving on - and really move on. |
| influence you. Knowing those will help you overcome | | | | Moving on means you don't keep a running total of |
| them or use them. Are you saying 'Huh?" about now? | | | | how many losses you've had - that's the way to |
| Believe me, I understand. I felt the same way the first | | | | paralyze yourself. This brings us to the next point: |
| time that someone tried to explain how the mind | | | | Losing traders see loss as failure. Winning traders see |
| games we play with ourselves influence the trades | | | | loss as learning. |
| and decisions that we make. Let me break it down | | | | Not too long ago, my twelve year old son told me that |
| into more manageable pieces for you. | | | | before Thomas Edison invented a working light bulb, he |
| Anything involving winning or losing large sums of | | | | invented 100 light bulbs that didn't work. But he didn't |
| money becomes emotionally charged. | | | | give up - because he knew that creating a source of |
| All right. You've heard that playing the market is a | | | | light from electricity was possible. He believed in his |
| mathematical game. Plug in the right numbers, make | | | | overall theory - so when one design didn't work, he |
| the right calculations and you'll come out ahead. So | | | | simply knew that he'd eliminated one possibility. Keep |
| why is it that so many traders end up on the losing | | | | eliminating possibilities long enough, and you'll eventually |
| end of the market? After all, everyone has access to | | | | find the possibility that works. |
| the same numbers, the same data, the same info - if | | | | Winning traders see loss in the same way. They |
| it's math, there's only one right answer, right? | | | | haven't failed - they've learned something new about |
| The answer lies in interpretation. The numbers don't lie, | | | | the way that they and the market work. |
| but your mind does. Your hopes and fears can make | | | | Winning traders can look at the big picture while playing |
| you see things that just aren't there. When you invest | | | | in the small arena. |