The most important thing in trading activity is a psychological mindset trader. Suffice it to say that that the traders on a virtual account (with virtual money) often show good results, but transition to real money their results strongly deteriorate. What’s the matter? The same trader, the same quotations, the same tools used – and a different result. The answer is simple – in the action of psychological factors. Working with real funds, the trader most heavily dependent on their own feelings of fear and greed, which is also called engine market. These two often opposing feelings do not give the trader calmly and soberly assess the situation, timely closure of unprofitable positions or record profits.
Panic in the market leads to sharp changes in exchange rates and very often such a motion does not reflect the real processes in some of the world economy. It is appropriate to recall the definition of “collective intelligence”: mind of the crowd is very underdeveloped intellect representative of the crowd. And when it comes to the large number of traders representing both private individuals and various investment funds, finance houses, banks, the total mood the crowd is often exposed to panic despite the logical arguments sober trader. And if it will be understood by the general mental attitude, then the success of our trade will rise sharply.
But while it was a “collective mental attitude.” And if you want to see, understand and use the general attitude for private trade, it is possible to carry out, watching the market reaction to events in world politics economy and nature. Much more difficult to rein in your own mental attitude when making purchasing decisions or foreign currency exchange. When deciding a novice trader on one side – the weights is intuition, fueled by emotion, on the other side unbiased knowledge Devoid of emotional mood, relying only on facts and objectivity. That outweighs? Of course, intuition! But intuition is not a newcomer is based on experience.
Because of this decision is made on emotions- The main enemy and the assistant trader. How to learn to adjust their emotions, to minimize their impact when they are prevented? The answer – to improve the discipline of the trader. Only the disciplined trader will be able to operate in the market as much time as necessary to achieve the goal. Only discipline will not allow the trader to break down under the influence of the market and leave the market ahead of time. There are plenty of ways of working to strengthen the discipline of the trader – is measured and schedule, and the timing of frames to work on the basis of their psychological features … But the most effective is still the use of trade system.
Follow the signals of the trading system is also quite easy. To do this, well aware that the situation for opportune moment to enter the market will always be repeated until the “live” market. But many traders are succumbing to the temptation “Time to jump into a departing train, part of the market is either too early or too late, that inevitably leads to losses, and psychological distress. Working with financial instruments is not easy, primarily because of the strong the negative impact of failures on the psychological state of a trader at heart distress at the loss of money failed transaction and subject to continuous psychological pressure.
You’d be surprised, but on the psychological state can affect negatively and win, the trader, successfully entering the market closes the position at a profit. In this case, the risk may be related to the revaluation of their trade skills and decrease in attention. Describing the result of winning, we consciously draw the reader’s attention is the perception of earnings as a result of the last transaction with a profit is often perceived as a trader of the amount earned, although the earnings We can only speak as a result of several transactions, say, a month or longer period. Then the results all positive transactions are averaged, and we’re talking about the average of positive transaction and the total profit. The results of all negative transactions also averaged – obtain the average loss-making, and in addition to it – the rate of total loss. Gross income minus the total loss of earnings over a certain period of time, and we equate to earnings. If the trader will operate primarily concepts related to overall performance, rather than appeal to the momentary gain, such an approach would reduce the psychological pressure as a result of each the deal, “averaging” the impact on a large time period, month or quarter.