Psychology is one of the strangest areas of forex trading. You can be making
trades most of the time on your demo account but as soon as there's real money
table - even if it's on the tiniest of trades - your system goes to pot and your
starts to evaporate. If that's the case with you, it's time to examine your
trading psychology and see how you can improve it.
Think in PIPs
The amount of pips you risk on a trade will stay near enough constant regardless
the size of your trading account.
This is actually a very important psychological barrier to overcome. Early on in
trading career you'll almost certainly be concentrating on how much money you're
and (hopefully) making. As your trading skill becomes more successful, the size
of your trades will
naturally increase. And then your conscious mind kicks in and conspires against
causing you to make novice-like mistakes even though you're experienced.
If you've just started trading this can be even worse. Even the smallest stake
though your entire life savings are riding on this trade being a success. At
translating it into pips makes any nagging worries and doubts slightly more
Become a Robot
While many forex robots make more for their creators than they do for traders,
of making your trading as robotic as possible helps a lot.
The more you can detach your personality from your trading the better. Our ego
the only thing that stands between us and an every growing bank account.
If you find you are kicking yourself when you examine those trades where you
early or moved your stop loss before your own trading rules really allowed you
becoming more robotic like will help improve your trading psychology.
Less is More
I know you're probably thinking that this is a contradiction in terms. After
all, if you
can make more trades then surely you can make more profit?
That's true if every trade you take has a high chance of working out. But if you
and examine your recent trades, there's a good chance that you took some "on the
though they didn't click every possible box they should have. Then you find
kicking yourself when you go back and examine them.
So discipline yourself to take less trades - only the ones that totally fit the
system you're following.
And while you're at it, cut down on the number of pairs you're trading. Yes,
less is more works here as well.
Instead of trying to be an expert in three or more pairs, cut down to two or -
better yet - just one pair.
You'll probably need to go cold turkey when you do this but after a few days of
one pair you'll be kicking yourself and asking yourself why you didn't make this
a part of your
trading psychology earlier.