The vast majority of Forex education organizations fail to address
the only true characteristic of a market place, the human nature. You can easily find loads of charts, pivot points, moving
averages, trend lines and all sorts of Fibonacci ratios, together with
the latest in trading automation. Any Forex website publishes some or
all of these data, along with myriads of other details, interviews and
opinions. You may even get entry and exit signals, support and
resistance levels, all of which could appear as sufficient in the
decision making process.
I was under the same impression as a beginner, I was at the
same level as an intermediate trader and only heavy losses and low
risk/reward decisions made me look for a different approach to trading.
If you are aware of the importance of having a trading plan
for each trade you plan to initiate, then you must be familiar with
moments of doubt, when following the opening of the trade, the market
goes awry, together with your emotions and self-esteem. Do you feel frustrated? Join the vast club of frustrated professional Forex traders.
When you see the market moving against all odds and logic, your
emotional self cries for an immediate position reversal (SHORT from
LONG and vice-versa), in a complete disregard of your own trading plan.
On the other hand, all your training books, videos and mentors have pumped the "trading plan supremacy" into your brain.
While the viable solution seems to reside in the robotic way of
trading the plan, a professional operator must learn to listen to his
or her "hidden partner", the subconscious. Our brain is capable of storing immense quantities of data,
without us being aware of it. Our five senses perceptions are in
constant use and they permanently add to our overall life experience.
While our subconscious is capable of dealing with all this seamlessly,
the conscious mind has only a very limited operational capacity,
primarily used to help us dealing with our daily tasks.
As we trade, ALL our experiences are deposited deep within our
brain, slowly building up what I call the unseen analyst. This is what
you may call the sixth sense or the instinct traders develop as they
progress.
As the name of the game with Forex trading is VOLATILITY and
80% of all trades do not last more than 2-3 days, with the vast
majority of them being daytrades, it is easy to accept that conditions
can and will change in a heartbeat, rendering most trade plans
obsolete. The only way to alleviate the contradictions between your
emotional self and the heavily trained brain is to learn how to give
them priority over time.
As a beginner, you simply cannot have the emotional experience
to "feel" anything related to the market processes and therefore it is
advisable to rely completely on the mechanisms of a trading plan. At this stage, take your time to learn how to interpret the
charts, prepare yourself according to the daily economic calendar and
how to construct a comprehensive trading plan. Once you took a trading
decision, stick with it, no matter what. At this stage, you are a
robot, implementing a trading strategy. Your emotional weight should be nonexistent in the economy of the trade.
As you progress along the path of becoming a professional Forex
operator, your unseen analyst will start adjusting your trading
decisions, silently participating in your trading decision process. It is now the time to make room to your "feel", to accommodate your growing sentiment of "feeling the market".
Your emotional weight should now become an accepted presence.
You will soon learn how to adjust this "mix" in a way to achieve the optimal trading performance.
by Bogdan Vasile
http://www.earnforex.com/articles/forex_trading_psychology_learn_to_see_the_line_between_the_trading_plan_and_your_emotional_impulses.php
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