If you just started trading, you’ll most likely encounter various “experts” who claim that financial education is the most important aspect in order to be able to trade. However, the financial related information can be understood even by a 14 year child, so despite those claims, with today’s article we want to start digging into the psychological aspects of forex trading.
Being emotional while trading
If you are a human and you aren’t a sociopath, you are most likely experiencing emotions on a day to day basis. Trading is not an exception, from the contrary, most beginning traders get overwhelmed by them and their performance gets hurt.
Before we talk about in detail about each negative and positive emotion, let’s first understand why forex trading makes you to react in an emotional way.
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Uncertainty
We as human beings, besides the fact that we are the most advanced creatures on earth, we still have some basic animal instincts which help us survive when faced with dangerous situations. Since forex trading carries with it a high degree of uncertainty, our primitive part of the brain will activate those instincts are thus generate that flow on negative emotions which hijacks your trading.
This is something you most likely had experienced many times or you should experience, if you just started trading. It is something normal, everyone will go through this process.
Being comfortable with uncertainty
The key to emotional regulation is to get, through practice, comfortable with uncertain events and learn how to think in probabilities. Is the only options you have when facing with situations with an unknown outcome. We’ll dig into this subject in a later material, but for now, understand the fact that we as human beings are not build to be successful traders. From the contrary, our biological structure stops us from being successful in this area.
You need to develop new habits and beliefs and integrate them in your trading regime, so you will manage, though diligent work and consistency, to embark on a journey which could take you towards a successful trading career and a happier life.