Psychology is considered to be one of three pillars in trading (along with trading strategy and money management), on which entire success of the Forex operations is based. That is exactly why it is crucial to have a proper psychological determination during trading time by controlling your emotions and preventing interference of emotions into decision making process. Prior to starting market analysis and setting yourself directly to trade, devote some time to a correct determination to work. First of all, give yourself a smile and try to relax. There if no use in a hurry, whereas a positive determination is crucial for trading.
When a person is in good spirits, intellectual activity is enhanced, which means that result of work will be fine as well.
Further it is required to remember that during Forex trading trader more often suffers from two sorts of emotional shock. The first one is euphoria felling coming after first successful trades. Self-esteem of person growth and sense of self as a cool specialist occurs. Control over further trades falls down, why have you to slow down if success is almost in your hands. When a person is in such set of mood, the risk of mistake is great and you can finally lose control over situation. This way trader gets a series of loss-making trades that desperates him a lot. Irresistible desire to play back occurring then is only able to worsen results of trading.
Forex is not the place for gambling and hasteful trades, because trading must strictly follow an earlier preset plan. Acceptable borders of profit and loss must be defined before trader runs trading terminal. Trader must also get prepared to these amounts so that they won't be shocking and unexpected. Acceptable amount of potential loss must not exceed the amount, which trader can afford to lose without psychological concentration.
It is important to keep algorithm you elaborated before. It includes termination of trading after you have received planned profit and loss. Overpowering gambling desire is crucial. Psychology of the Forex trading is able to improve performance of the Forex operations significantly on condition it is put to good use.