Importance of psychology in Successful Forex Trading
Amid market movements, our intellectual and emotional state makes a real contribution to Forex trading results. If you take the time to think about the effectiveness of your trading, you will probably recall many examples where your thoughts or emotions hindered the productivity of your trading before you made decisions, or due to lack of judgment, and you now think that you should not have done that.
Monitoring your emotional state
When we see a first-class athlete, miss a decisive penalty in football, make a double mistake in the critical time of a tennis match, or cannot make a short putt and lose the golf tournament, this is not because these players do not have certain skills or abilities to achieve success but at these moments their emotional state changes; they experience increased stress, anxiety or fear.
Feelings of stress, anxiety, and fear also have a significant effect on trading performance as a result of our cognitive functioning, reducing blood flow to the frontal lobes. That is why, in stressful forex conditions, traders often make mistakes in the decision-making process, react emotionally, and then, look back, question themselves.
The ability to manage your emotional state and feelings of stress, anxiety, or fear, can have a significant impact on the quality of your trading decisions and the results obtained.
Putting yourself into practice mode of monitoring emotional state regularly can help you increase your stress threshold and, thus, provide you with powerful techniques for managing your mental state before, during, and after the trade. One of the easiest and most powerful ways to control your feelings of fear, anxiety, and stress is to regulate your breathing.
Exercise: Focusing on the breath
This is a great method that you can use to calm down and get together before starting a trade or at the time of its peak which perhaps, will help you manage your forex trading. You can also use it after stress, for example, after a losing position, and it will help you return to normal mental state again before you resume trading.
This technique of focusing on breathing is mentioned in Jason Selk’s book “10-Minute Toughness” because it is easy and simple to remember and execute. This exercise will take you only 15 seconds and will allow you to change your inner feeling.
1. Take a deep breath with the diaphragm (stomach), filling the lungs with air as much as possible, for 6 seconds.
2. Hold your breath for 2 seconds, allowing air (oxygen) to circulate throughout your body and reach the brain.
3. Exhale slowly (as relaxation) for 7 seconds.
Purpose of psychological preparation
Perform 20-40 breaths during the day, which will fill the brain with oxygen and increase your stress threshold.
Conclusion
Psychological preparation increases your potential for trading results, and, regularly applying it in practice, you can develop new neural pathways in your brain that will raise your stress threshold, provide conditions for the development of various emotional reactions and conditions, unique and desirable principles of trading behavior. Try the above exercises in practice, and be sure to unsubscribe in the comments.
If you are new to Forex Trading, don’t miss to read the articles below, exclusively written by FXCC for Forex Trading beginners
– Learn Forex Trading step by step
– How to read Forex charts
– What is spread in Forex Trading?
– What is a Pip in Forex?
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