Forex Trading and Psychology

Foreign exchange trading is a process of self-sublimation, honed to a heart ancient well without waves, Mount Tai is not in front of the eyes and does not change color, recognizes the general trend and follows the trend. China can get out of the fire

I believe that all foreign exchange traders have experienced pain, excitement, confusion and other psychological states. To become a successful trader, you must first understand yourself and do it when trading - normal heart, a very simple truth, but it may take a lifetime to achieve an ideal state. Whether it is for foreign exchange trading or other decisions in life, impulse is the devil, and emotion will go to hell

For beginners, fear and greed are the two biggest obstacles. Placing an order is a negative number, and when the slight fluctuation pullback is getting bigger and bigger, the panic in my heart can't be added, I start to doubt my judgment, and start to think wildly, is the direction wrong, how much money will I lose if I don't come back in the direction, if all kinds of negative information come to me, then, position squaring, and then the direction may change in the direction of the beginning; so, backhand order, go through the same process again, and finally blow up, the fear caused by the loss when I can't overcome the normal fluctuation is the inevitable mental process of entering the foreign exchange market, how to overcome the fear?

Do more simulation, place an order on the simulated account before placing an order in the real warehouse to see if it follows the trend; light warehouse, do enough homework before placing an order, recognize the trend and follow the trend, place an order or place an order and throw it aside, go out to play or do something else, try not to watch the plate, even if you watch the plate, don't position squaring at will, you can move the loss stop in real time; be strict, self-discipline, this is one of the most important contents of fund management and risk control.

Greed is the original sin, but how to judge whether it is greed or profit maximization requires a lot of practice. In foreign exchange trading, there is a famous fish head and fish tail theory. If you don't eat the fish head and fish tail, you will eat the fattest fish body. Fish heads and fish tails are actually a process of transforming one trend into another. The exchange rate is always fluctuating, falling and rising, rising and falling, absolute or almost no one-sided trend of correction. Yes, but not much, because the essence of the exchange rate is that people are bearish or bullish, and the long position will rise as much as possible - it can also be simply understood as more people who are long will rise, and more people who are short will fall (but the long-short sentiment index given by some institutions can only be used as a reference, not as a basis for placing orders, because it reflects the long-short will of the past and retail investors, rather than the will of most institutions and people in the future).

Those who enter the market at the right time are experts, and those who leave the market at the right time are experts. When the profit reaches the expected target or the indicator turns, they no longer fantasize about greater profits, and they can control their greed properly. At this time, not being greedy can maximize profits.

Contrary psychology is a common problem for many people. In the foreign exchange market, there is no need to be unique. Subconsciously, everyone thinks that they are the greatest miracle in the world and unique. Therefore, it is easy to make a contrarian mistake in the foreign exchange market. Thinking about being unique and maverick, while in most cases in the foreign exchange market, the only result of a contrarian mindset is to go against the trend, and the result is to lose money. Therefore, the market is always right, and the wrong is only ourselves.

The herd mentality is the magic weapon to win in the foreign exchange market. If you follow the trend, you can make money. How to grasp the trend? For ordinary people who are difficult to grasp the fundamentals, this requires technical analysis.

In fact, both fear and greed can be overcome through technological advancements.