The Foreign Exchange, or Forex, market is one of the world’s biggest markets in terms of both volume and transaction amounts. Forex certainly provides plenty of opportunities to make a considerable amount of money and make it quickly.
However, there is also an equal amount of risk in losing just as much and at the same speed. This article aims to introduce you to automated Forex trading to improve your chances of survival and success in this unforgiving market.
Importance of Psychology In Forex Trading
There are plenty of trading strategies you can adopt or develop to maximize your chances of success and give you a better chance of survival. Regardless of the strategy you choose, though, psychology plays a critical part in the success or failure of any Forex trader.
It is the psychological aspect of Forex trading that most traders find the most challenging part to master. It is estimated that less than one-in-ten Forex traders survive to become successful in this market. The main factor in the failure of the vast majority of people who give Forex a try is trading’s psychological aspects.
Even those new traders who have followed the recommended steps for getting started tend to suffer from the mindset. They’ve done their research into the fundamentals of Forex trading; they’ve opened a demo account; they’ve tested several strategies; and chosen the one that has provided the best returns. However, even with all the preparations, when it comes to trading with their real money, it is an entirely different story.
Opening a trade too early, closing it too late, or vice-versa is common for the inexperienced trader. The results? The ‘perfect’ strategy that worked every time on the demo account, suddenly implodes and your capital starts to dwindle. Of course, it is not the strategy that is imploding; it is the trader’s reaction to the psychological aspects of trading their precious capital.