Forex Psychology V

Hope

Another deceptive emotional state. While real-life hope is one of the most positive gestures, a life-saving situation, even when it comes to forex psychology, it has no place. The more you look at the market, the more impartial your assessment will be. In every open order there is hope that it will end favorably. But the market is not excited by hidden hopes, it is driven by inexorable laws. The only way to isolate feelings when deciding to open an order is to be tailored to the trader's abilities. You should not gamble on amounts that can not be risked and rely on "secure" entry setup.

Fear, uncertainty, addiction, greed, euphoria - all emotional states that can be related to the discipline of Forex psychology. What unites them is their negative impact on objectivity in forex trading. The excited, enthusiastic, insecure, dependent trader does not perceive the market adequately. His decisions are not the result of an impartial analysis of the situation, but are heavily influenced by the emotion that is currently in the hands of him. Many forex traders believe that the ideal option is to completely overcome emotions. Unfortunately, this is bound to the impossibility.

Forex Psychology IV

Greed

This is the leader of feeling in trading. It is important to follow the chosen strategy and close the deals when the price reaches the specified level, but this is not really that easy. Seeing the profit, the sense of satisfaction goes into greed. By itself, trade is a process of making money, which naturally provokes trader greed, and that is why it is not easy to fight it. The way to achieve this is only through patience.

Euphoria

This is one of the most treacherous emotional states when talking about forex psychology. It is a phenomenon that generally is considered to be a positive emotion in life. If the order develops positively and even more when it ends with profit, the investor does not need to immediately attack the market again, enthusiastic about the sense of infallibility. Euphoria blurres the mind, making it difficult to take adequate and objective decision-making solutions. It should not be forgotten that even the "most secure" order can be reversed. No one is so great as to overpower the market continuously. No one is greater than the market.

Forex Psychology III

Uncertainty

First of all, uncertainty. Transitioning from demo to real account should be simple. But just then comes and the fear and you are starting to realize its power. That's what makes you feel insecure  and uncertain in yourself and consequently you miss the great opportunities that the market provides.

Fear

Fear is a condition that can be both beneficial and harmful. On one hand, the deterrent effect of fear is able to guard against reckless actions in trade. On the other hand, uncertain and timid actions will never lead to success. What is the medicine against fear in forex? It is the same as with all other negative emotions – rational parameters of the order and discipline.

Addiction

It appears that genetic predisposition to addictions of individuals is essential, along with the social prerequisites. In forex any gain provokes the player to return immediately to the market, proud of himself and his abilities, confident in the commercial genius, ready for new exploits and new more robust gains. Any loss in turn evokes the feeling of revenge; his recent return to the market will prove that the mistake will not be repeated and that these accidents are temporary and he is a profitable trader.

Forex Psychology II

Regardless of what the forex trader's decisions are based on - a fundamental or technical analysis, an internal sensation or one's own intuition whenever he enters the market feelings and emotions are rising.  According to experts in psychology and also active participants in the exchange trade, the actions of successful traders are the result of premeditated plans. Adhering to these built-in safety rules helps keep concentration and an objective view of trade to recognize market trends and changes in them at the right time. It is important that the rules are clear and simple, sufficiently flexible and adaptable to market conditions, as this will show their effectiveness in making a specific decision in complex situations. They become an important part of the winning forex trading strategy.

Undoubtedly, participation in capital markets is a high-stress process. But there are certain emotional states that are considered as elements of forex psychology and the following articles will show how exactly they influence.

Forex Psychology I

Every good Forex trader understands the importance of psychology, since currency trading is an exclusively intellectual challenge. It is not enough to learn basic concepts and processes related to the foreign exchange market. The success or failure of the participants is largely determined by their ability to control and control their emotional state and behaviour. It takes strong discipline to cling to  the chosen strategy and to follow unswervingly the rules for risk management. Without solid risk management even the best forex trading strategy would not lead to the desired success.

Is there a right strategy and how different emotional states as elements of forex psychology could influence will be discussed in the next four articles.

ActivTrades Tools I SmartLines

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USD/CAD Rebounded from the post-FOMC lows

USD/CAD suffered huge drop yesterday because of the main markets’driver - the Fed's rate hike. The pair extended its downward slope to mark an intraday low at 1.2825 but it seems that markets already digested the news and the US dollar started to recover. And this combined with weaker oil prices that weigh on the Canadian dollar pushed the pair back above 1.2900.
On the four hour time frame the price has is developing below the bearish 20-day SMA and slow bearish 200-day SMA. RSI and stochastic have retreated from their extreme oversold readings and both are showing strong upward momentum.
Currently the pair is trading at 1.2905 but according to indicators has potential to move higher. First target comes at 1.2925 – 1.2935 – 50% Fibonacci retracement of latest 2017 bearish run and also flat 100-SMA. Further on bulls should aim 1.2950 – 1.2960 are and with a break to the upside doors are opened for testing the psychological 1.3000 hurdle.
The downside is supported by 1.2825 (the daily low) and lower at 1.2800 (last week’s bottom).