Trading Psychology on Forex
If you have a Forex account, one of the most important things you can do in order to become a more successful trader is to learn a little about psychology. It is important that when you order a trade to be executed, you are doing so for sound financial reasons and not because you have some emotional basis for the trade.
This principle of mastering your emotions is key to making money on Forex. Decisions to buy and sell must be based on the data that you can see emanating from the world news or from your trading site. Two contrary emotional impulses that cause traders to stumble are greed and a lack of confidence, which affect trading decisions.
Focusing too heavily on the money you can make from a particular trade or set of trades is a mistake, because it may allow your greed to get the upper hand in decision-making. Likewise, second-guessing yourself all the time may cause you to end a strategy that would have been successful had you given it more time. A lack of confidence in yourself can sometimes translate into too much confidence in someone else's market analysis.