We all know that the forex market is highly volatile and often decisions must be made in very short periods of time. The uncertainty premium above all things, and although today we have the help of numerous trading tools and trading techniques, no one knows for sure what will happen to the market prices. Faced with a bearish trend, no one knows exactly how low will, if it goes up, the question is how far risk for not sacrificing profits. All of this creates great anxiety and nervousness in forex traders, which means that often end up losing your money by making quick decisions.
The control of emotions and stress management
Given that everyone has access to the same information, to the same news, the same numbers, indicators, statistics, etc.. So ... What makes the difference between winning traders and losing traders?. The answer is that the former remain emotionally stable at all times, can handle the pressure of the risk and control their emotions. They understand that losing is part of the business. Trust their methods and trading systems, giving them peace of mind that losses are only small setbacks that will rest a while and then recover.
The most important thing is to enter the market calm and confident that everything will be fine. Ask our strategies ahead and trade on them will give us greater sense of security.
Control over one's emotions can be achieved through: Confidence in the probabilistic model, to be psychologically prepared to lose, operate without fear and self-criticism. We should not settle for the way we trade, but to investigate the mistakes and design trading techniques to overcome them. Keeping track of mistakes is quite useful to remove bad habits and avoid falling back into them. All this together will give us greater security and peace in difficult times.
The question among novice traders is: When are you ready?. That is, when you have enough knowledge , and when they become aware of learning and a sense of one's emotions when applied. That is, when one is aware of one's internal states, resources and intuitions, and when you can make a correct assessment of their own strengths and weaknesses as Traders. This concludes one thing: self-confidence, appreciation of our technical capabilities and emotional.
Emotional competencies required are:
A-control: keep an eye on the disturbing emotions such as extreme fear or feelings of absolute immunity and impulses which do not meet your trading plan.
B-Reliability: maintain appropriate standards of honesty and intellectual integrity, based on adequate Forex training and the predetermination of the actions to take in situations of gain or loss.
C-Consciousness: taking care of own business, and the fate of their trading activities.
D-Adaptability: flexibility to accept changes in the Forex market and positions.
E-Innovation: accept the new information or new insights, forecasts, or ideas that are better adapted to new situations
In terms of managing stress, take regular breaks help to combat it. In difficult times it is advisable to leave the room, and renew energies preferably outdoors. The practice of breathing exercises is also highly effective, helps to lower the decibels and think clearly again. Accept your limitations also helps release tension. Pressed with ambitious profit and take the limit only create more frustration, which significantly decrease productivity.
Discipline
In each trader forex solely responsible for their own decisions and actions and must face the consequences. This requires great discipline and ability to acceptance. Self-knowledge is so important in forex trading as the knowledge of the facts, economic theories, news, and Forex trading system. For it is not strange to see how many times the emotions prevail forgetting every tool and indicator. People who have self-control and discipline over your emotions are more likely to emerge as winners.
However, it is easy to do a self forex trading analysis to identify our strengths, weaknesses and personal tendencies because by nature, our perspective is subjective. To achieve this requires being willing to be completely honest with ourselves and accept the results of looking within. Admitting our mistakes is a very positive both in trading and in life, and allow us to understand why we lost and how to avoid that situation next time. It is possible to isolate the weaknesses and work on them, in the same way you can review and work on our method of trading.
Within the discipline includes the habit of the information. A professional trader should be routinely used to check Forex trading market information. This will give you the confidence to operate on the basis of accurate and objective, which together with the proposed strategy will avoid despair and impulsive actions that could lead to their losses good.
Then, discipline involves:
-Training. Trace and follow a training plan that would provide all the expertise required
-Auto-analysis. Conduct a thorough analysis of their own strengths and weaknesses, to seize early and work on the second
-Planning. Draw an operational plan, including trading strategies and methods
-Objectives. Ask achievable goals and measurable. Check them frequently and compare with the results, analyzing the reasons for the differences.
-Information. Regularly check market information and indicators.
Self-control. Practicing stress management techniques and emotions. Self-diagnosis and recognition of emotions.
Fear and Greed: Two sides of same coin
Fear and greed are the two sides of the same coin. Both can lead to losses if the reasons are opposed.
FEAR: usually arises when they start downtrends and the operator is left to despair. The operator acting calmly and verified before indicators and trends, is more likely to take advantage of changing trends and avoid losses. That's why the best in these cases is to set a "stop loss" and respect it, because in time "hot" and not be thinking with objectivity and complete reasoning.
GREED: This is the case contrary to the fear. It occurs when earnings increase and the operator fails to distinguish the time it leaves the position, always hoping to "get something to market." Of course this also has its peak before the fall, which in the best achieved lower profits ... and at worst might even lose.
To avoid falling prey to these emotions, the important thing here is to understand that both parameters, Stop Loss and Limit must be set before each operation based on technical and fundamental analysis of it, and then respect them.
Remember:
• Stop Loss: how much am I willing to lose
• Limit: how much am I willing to win
In short, the desirable attributes in the profile of a successful forex trader are:
-Auto-control (manage emotions and stress)
-Discipline (make a plan and follow it, observe the strategies proposed)
-Self-confidence (from both market knowledge and the self-knowledge of our strengths and weaknesses)
-Ability to acceptance (to be psychologically prepared to take risks and accept losses)
-Tenacity and perseverance (the forex market is long term, you must learn to wait and persist operation to achieve earnings targets, and not being discouraged at the first setback).
-Ability to adapt (keep an open mind and be receptive to new ideas and changes in the market)
Self-criticism (to learn from mistakes)
-Tolerance to pressure
-Perception and common sense (perceive market opportunities and to distinguish those highly profitable; meet own expectations of what the market might do next)
Mind-selective (ability to separate the currency market forecasts in general, current market position, not think about the market from the perspective of an open position).
