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Effect of emotions on your Forex trading

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The Key to Successful Trading

The key to successfully making money with Forex trading is to avoid emotional decisions and strictly stick to your previously thought out strategy. Relying on your gut feeling is certainly the wrong way to become a successful Forex trader. If you rely only on your gut feeling you will always lose money in the long run. Forex trading is a highly volatile market in which emotions logically arise. And it is these emotions that can influence your trading decisions. Unless you have a fixed Forex trading strategy in mind and stick strictly to that strategy, no matter what your gut feelings are. The key to success in Forex trading is system, market analysis and perseverance. In addition, you should read our 25 Rules for More Success in Forex Trading to achieve even better success in trading Forex and CFDs.

Trading System

Almost all experienced traders advise trading beginners to develop a system and stick to it, come what may. Allowing emotions to influence your trading decisions can negatively impact your trading success with Singapore Exness in several ways. Your system tells you what to buy, when to buy it and when to sell it. If you follow the system you will maximize your profits and minimize your losses.


Systems based on technical analysis and historical market trends generally have the greatest potential, especially if you are just starting out in Forex trading. But also many experienced traders with years of experience continue to use this combination to maximize their profits.

Basically:

When your gut feeling and your system disagree, the system is almost always right!

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Using a system takes the emotion out of your trading and eliminates the main reason why many traders fail, because your system doesn't care about emotion. It always stays on a set course. To be successful, your system should basically - whether you developed it yourself or copied a strategy already developed by someone else - dictate the entry and exit points of the trade.

Under what conditions should I buy ?

For example, you place a buy order when the price drops more than 10 pips because your analysis tells you that this will most likely be the bottom.

When should I sell again?

There are 2 reasons to close the trade - to maximize profit or minimize loss. This means you need to place a stop-loss order on each trade, as well as a take-profit order. Set these points according to your system at the price marks where your price target or loss limit is reached.

When can I question my decision?

Although the forex market largely moves in predictable patterns, there are always variations of the trend within these patterns. If you are aware of these variations, it will be much easier for you to decide if your previous decision still makes sense or if it is just wishful thinking. In this case you run the risk of bringing emotions into the trade and spoiling your business.

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