Psychology Of A Market Rally
Trading Forex is about more than just knowledge of technical computer programs. Trading is an art in itself. Even with a great knowledge and understanding of the market, you can constantly lose. There are no guarantees for success with forex trading. It may go wrong. But at the same time there is a good opportunity to get a great return on your investments.
You can have an expectation that the market will go up and you trade forex. Instead of getting up to the market, start moving down your stop-loss to close your trade. The next moment you see that the market begins to move up, the way you analyzed. You end up with a loss in the earlier trade, and now you are worried about buying again, even if you still have the feeling that it will continue to move up. It is moving up and now we are just frustrated that we do not take action to enter the market and also unnecessary losses (because we put a stop-loss in the previous trade. We just bought a bigger position To make up. This time we put the stop-loss too far. The market had already moved up quite a bit and as soon as we bought it led to a free fall. Our stop-loss was too far and Oooops!
The feelings, fears, greed and many times addiction to trade can just kill what we have in terms of market knowledge. Psychological factors and emotions greatly affect performance and thus results due to the dynamics of the market. When we talk about psychology, it's about both, a lot of psychology, like the trades around the world and our individual psychology.
This is how a average greedy traders mindset in a rally looks like.
Well said. Like that post and specially the graphic. It´s so true. :-P
Thank you, i appreciate! Safe trading :-)
this graph is me except i don't panic sell...but its me
I think many traders will at least go through some of them once.
I see, I don't regret following you :)
You describe very well what my mind is in a way going through when being on the market. I think the graphic would work even better as a gif or as multiple pics, concealing, what comes next on the graph. Looking back, i guess many people think: "yes btc/eth... obviously was going up". This way, one could regard both states. (this is not a hint to do so, only a thought)
Looking forward to read more from you!
Thank you, i appreciate it!