By: Sara Patterson
If you have been studying the Forex market, you most likely know that it is the largest financial market on the globe, by far. You also probably know that anyone can trade Forex, but not without risks. If you have spent some serious time studying Forex, you most definitely heard different experts tell you that before risking money in Forex, you need to do a lot of mental and psychological preparation.
Before trading Forex, all experts will advise you to get to know yourself well in high pressured situations. They will also suggest you formulate a thorough trading strategy and money management skills. Lastly, they will recommend that you gain complete control of your emotions in order to disqualify them as any sort of factor in your future Forex decisions.
Forex Experts' Consensus and Questions
There is a wide consensus among the majority of Forex experts about the above principles. While these experts do not agree about the best type of analysis, the most advanced Forex trading platform, or the best currency pair to trade, most of them agree that you need a specific mindset in place in order to achieve true Forex success.
The obvious question is why? If all you are doing is trading the Forex market, why are your thoughts and feelings even being discussed? How are they relevant to your success as a Forex trader? Is it not possible to succeed without these prerequisites?
The answer is that your thoughts and emotions are very much involved in your future success or failure in Forex. The following is a list of reasons every trader should train their minds and hearts before trading Forex.
• Lower the Pressure: It is no secret that a relaxed trader is a better trader. If you can take your losses without letting it get you down, you will most likely trade more professionally and less based on your weak human tendencies.
• Don’t Overtrade: If you have complete control over your emotions, than greed will not become your guiding light in your trading. What this will prevent is the need to overtrade as a result of losses you experience.
• Keep up the Motivation: I am sure you do not need to be told of the importance of motivation. A direct correlation between high motivation and success has been proven time and time again. If you control your emotion when trading Forex, you will not allow your losses to bring you down and will therefore maintain a higher motivation, which will eventually translate into dollars and cents.
• Recognize Spammers: In the previous points, we focused on emotions, but this point is more relevant to mental training. If you prepare your Forex knowledge before trading, ie study the market and become familiar with the ins and outs of Forex trading, this will help you recognize Forex scammers as opposed to real Forex services. In reality, this requires you train your mind and heart because if you immobilize your emotions, the various promises being thrown at you by brokers will have no effect on you, and your familiarity of the market will enable you to separate the real services from the scams.