When it comes to Forex Trading, winning is as much as mind over matter as picking the right entry and exit points. Any forex trader with any experience that the key to success is not only the forex trading system, but a combination of forex trading system, money management and psychology. Working a winning trade is very much dependent on the knowledge of your own mind and coping with their own emotions.
The Forex market is much more than a mathematical game. You can connect the right numbers, the right calculations and you should come out a winner. But, why is it that many of the forex traders end up losing, we all have access to the same numbers, the same data, the same information, so if it is only math, then why do the same set ups end with different results. Of course the answer lies in the interpretation of the numbers, but also the most important psychology wise is that every forex trader must understand that every set in the foreign exchange market is completely unique.
The forex market is made up of millions of forex traders so no moment or set up is exactly the same, and we must understand that anything can happen. Your forex system gives you an edge, but this edge is only an indication of a higher probability that the trade will go in your direction. Many forex traders get mixed up with their emotions in thinking that they must be right. The forex market is always right so your trade plan must included the possibility that the trade will be wrong and the steps you will take to exit that trade with the minimum of losses.
You don’t have to know what the market is going to do to make money. In order to make money in the forex market is to accept that some of their operations are going to lose and also understand that there is a random distribution of winners and losers. A losing trade is not a reflection of you and the best way to deal with losing trades is to move. It is simply a loss, and the best way to deal with this is to stop losing money by not seeing this loss as a failure but as a learning experience.
Winning traders see loss as a way to learn something new about the forex market or themselves. Forex trading is numbers game you have to go though the losing trades to get to the winning trades but psychology it is difficult to keep in the trade when you are losing trade after trade? It is important to remember that one trade does not make or break a trader. You should focus on the trade at hand, follow the triggers set up and then define yourself by what really counts in the overall balance.
One of the ways to keep the focus on the overall record is to split my record my trades in blocks of 10. At the end of the 10 operations that then work out the gain or loss and the win / lose ratio. This keeps my attention on the bigger picture rather than individual forex trades.