We notice that sometimes traders blame a Forex trading platform or a Forex broker for their losses in the market. And think that moving from one trading platform to another will help them succeed. Of course a Forex platform may contribute to the trading, but the main factor of a success in the Forex market is the trader himself and his personal psychology.
Most psychologists notice that the most common approach to the Forex trading is a trend-following, that made them study the human reactions to the market’s behavior.
Basing on the historical studies of the Forex market’s behavior, a trader should try to distinguish those current trends that are likely to be continued from those that are about to reverse. This is a very hard approach to Forex trading that requires considerable time for market analysis, ability to follow the market’s movements and a clearly defined trading plan.
Let’s Check If You Are A Good Trader.
Due to some researches it is possible to distinguish successful traders from the less fortunate ones by a number of psychological features. Personal psychology of a trader will affect the degree of his success when trading using a method of trend-following. Here are few questions for self assessment that allow finding out whether a trader is faced with challenges and difficulties when trading on a Forex market. Sincerely answer these 12 questions, using YES or NO.
1. If the market starts moving against you, does it always plunge you into disorder?
2. Do you enjoy the process of exercises and activities which are accompanied with risks and thrills?
3. Do you have a habit to postpone any troublesome work?
4. Do you often have a change of mood – from bad to good and vice versa?
5. Do you prefer to leave the house and meet with friends to spend time together than staying alone to read a book or watch TV?
6. Do you always apologize to others if for some reason you didn’t do what you have promised?
7. Do you often accompanied by stress, pressure and depression in your everyday life?
8. Would you prefer to try an unfamiliar and exotic food than usual products?
9. When doing a necessary work, do you often try to do it quickly, than deliberately and carefully?
10. If you lose a trade, do you feel guilty and look for the reason in yourself?
11. Do you take any tonic medicines and drinks (except alcoholic) while working?
12. Are you often late for meetings and events that were agreed beforehand?
Now let’s see the results:
If you answered YES to the questions 1, 4, 7, 10 (or most of them you replied in the affirmative), then you have a very high level of “neuroticism.” These people mostly have a negative emotional state, anger, anxiety, depressive mood.
If you answered YES to all or nearly all questions 2, 5, 8,11, then it is likely that you have a large degree of “openness to experimentation,” which means a tendency to researches, innovation and risks.
If you have an affirmative answers to all (or nearly all) questions 3, 6, 9 and 12, then you have a reduced rate of “good faith”. This feature speaks of responsibility, commitment and precision.
The best choice of qualities and features when using the trend-following trading strategy are high honesty, a lack of neuroticism and a low level of willingness to experiment. Once again, look at the test results.
A good trader must be responsible and always follow the rules, he must not be impulsive and emotional (neuroticism), and work to make a profit, not for experiments.
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