The Power of Trading Psychology

Beginner Questions
1

I have found that trading psychology has been a very powerful factor when it comes to trading. In my experience, technique accounts for about 10-20% of trading, whereas, the real making money part, the time when you execute or exit a trade, when things are won or lost, is 80-90% psychological. I am always pursuing and looking for ways to improve and enhance (not get rid of) my own psychological influences.

I was browsing through Youtube looking for more insights into trading psychology when I came upon a video from a one Dr. Andrew Menaker. As I watched it, his presentation touched on practically every aspect on what I experience when I trade, especially the parts regarding doubt, fear and uncertainty. It was extremely confirming as well as relieving to watch and also gave good techinques on how to overcome the hardwired reactions of the mind when trading.

I am not here to promote him or his course nor am I making any kind of profit from this. In fact, there are numerous full length presentations of his you can find on Youtube, just search for his name. It is a great free resource for anyone who wants to further their understanding and education about trading psychology without having to spend thousands of dollars for a course.

I know how hard it is to trade, let alone be consistent, and I found the more I get my mental affairs in order, the easier it becomes for me. I hope you find it as useful as I did and it has helped you some. Good luck to anyone who has chosen to venture upon this unique path.

Happy Holidays!

2

I always say that psychology makes and brakes traders which is one reason I recommend skipping demo accounts. It is easy to learn bad habits and hard to get rid of them.

3

Interesting advice. So it is a more consistent method for you, yes?

4

I agree with you, its very very important to keep yourself calm and cool when you are analyzing the forex market, further more you need to have a predetermind set of rules before you even look at a chart.

6

Completely agree. Demo might be useful, but it can also be damaging. A very small amount can be dedicated to learning forex better.

7

An average Joe/Jane could lose $1000 a year trading forex for some years without lowering his/her standard of living much. Forbes reports that the average American spends that much a year on dining out for lunch alone. Putting on that real risk would be much better than a demo account with 50,000 imaginary dollars in it.

8

Its true that you don’t learn about trading psychology in a demo account but if you can learn a technique of trading in a demo account and then open a small real account for the sake of practicing trading psychology, you can do well.