The Professional Forex Trading Course – Lesson 8 - Psychology - Part 1
Psychology is more Important than Strategy
Winning traders are different NOT because of the indicators or technical knowledge they have. What makes them different is the mindset they have towards trading.
The best strategies and indicators will not help you succeed if you have the wrong mindset towards trading.
Many traders constantly search for the 'Holy Grail of Trading'. A special secret strategy / indicator that can predict the market and win all the time. Does it exist ? NO
The secret to successful trading does NOT lie in an amazing theory or indicator. The secret lies the traders' MIND.
Psychology of Winning Traders
1.Discipline
Trade according to your trading entry / exit rules. Never on rumours, opinions and emotions.
Have the discipline to stick to your strategy through the wins and losses
Avoid listening to the opinions of 'experts' who can 'predict' the market based on insight or news.
2.Think Statistically
A winning strategy will have wins as well as losses
The losses can come in a row (5-10 losses together)
Do not be greedy when you win or fearful when you lose
Every trade outcome is statistically insignificant
A good trade can end up as a 'loss'. Focus on following the rule and not on the outcome of each trade.
As long as you have an edge (> 50% win) and average win is more than your average loss, you will be profitable over many trades.
3.Patience
Only trade when there is a high probability opportunity
When the rules tell you it is not the time to enter, do NOTHING
Knowing what NOT to do is as important as knowing what to do
4.Focus on 'What' is happening and not 'Why' it is happening
It is a waste of time trying to figure out why the market is moving a certain way
Price movements are not caused by public news (e.g. Yen increased because of North Korea firing missile)
Avoid associating market trends with news events
