One of the main reasons forex traders fail to make a profit above all else is fear, fear of losing, fear of not making enough profit, and just a general fear of failure.
Elements Of Fears That Impact Your Forex Trading.
There are 5 types of fear, extinction where it is a fear of death, mutilation where you have a fear of damage to yourself from an incident or people, a fear of loss of autonomy where you fear not being able to be in control of your destination, fear of separation where you are separated from the heard and you have no guidance, and the last is ego fear where what you feel about yourself comes in, how you feel about your self worth. One of the two of these that apply to you as a forex trader is separation, where you are doing something different from the herd, and since 95% of traders lose you need to be doing something different from the herd. The other emotion that comes into play is ego, in forex when you lose there is no excuse you can make, for instance when you are a defence lawyer where you can always argue that the case was too difficult to win. In forex a loss is a loss, and this is where the problem arises for most traders, it is so hard to accept that even though you have tried your hardest and taken everything you can think of into consideration the trade still went against you. When you suffer a loss in forex you have to accept that it just happens and there is nothing you can do to change that once you’ve made your loss, there is no appeals court.
Put Your Forex Into Perspective.
The only person that can deal with the ego issue is yourself, if you make a mistake or simply take a loss that is part of your trading, there is nobody there that will laugh at you, and there is no one there to make it better or sympathise with you. You need to accept that if you don’t lose you will never win, since you would never trade, losses are short term pain for long term gain. Take a salesman for instance, he will never clinch every sale, he will have knock backs, but a salesman will not let this affect him, he will just move on to the next opportunity. The difference with forex is, is that when a salesman does not close a sale he won’t have lost anything except maybe a bit of time, with forex when you lose you need to make up those gains before you get back into profit. You need to be in a mindset that these losses do not affect your trading mentality, stop worrying about them and move on, keep the losses as small as you can, never open up your stop loss, and stick at it.