Forex Psychology: Learning to Respect the Border Between a Trading Plan and Emotional Surges
A large number of organizations that teach beginners to trade in the Forex market do not take into account one of the most important components – human nature.
Each site dedicated to Forex trading provides a huge amount of information a trader needs – this is news, forecasts, interviews with experts. In addition, they offer pivot points, charts, trend lines.
If you wish, you can even find signals to enter and exit the market. There are also support / resistance lines. You can use this information to make the most effective decisions. They provide tremendous support to newbies who are just getting started in the market. But experienced traders prefer to look for additional ways to reduce risks and avoid losses.
It is known how important a trading plan is. But when the market situation begins to change unpredictably, it has a strong impact on the emotions of the trader. He may have doubts, and, as a result, mistakes. This situation pushes you to change positions and ignore your trading plan. However, the assertion about the main role of the trading plan, generated and supported by all tutorials, gradually grew into an axiom. Therefore, it is impossible not to take it into account.
Equally important is the meaning of the so-called “inner voice”. After all, the mind and subconsciousness act in different ways. To make the best decision, you need to consider both. When bidding, experience has a big impact on the mind. Some call it the sixth sense, others call it the “inner analyst.” It is often favored over the plan.
Creating a trading plan may seem like an unreliable and outdated method to many. This opinion is strengthened by the volatility of the Forex market and the fact that the vast majority of traders do not leave their positions open for more than 2-3 days.
It is not difficult for a beginner stock trader to get confused in all this. In order to find a balance between the mind and the inner voice, it is necessary to learn how to prioritize. When it comes to beginners, they still have little experience. They will not be able to sense the direction of market processes. Therefore, they are encouraged to follow the trading plan.
To do this, you need to take your time, learn how to correctly interpret charts, research the economic calendar, and acquire the skills to build a comprehensive plan. Having accepted a trading plan, under no circumstances should one retreat from it, for a while, forgetting about emotions.
As more experience is gained, the trader will be able to trust his “invisible analyst” more. He will help him make decisions and minimize risks. The recipe for success for a professional is to combine emotions and rationality, but not to mix! Each of them is good in its place.