The victim’s psychology on Forex
In order to succeed in any endeavor, it is necessary to choose the right approach to the organization of the case. This also applies to exchange trading at the Forex market. There are no trifles in currency trading. Beginner speculators usually do not take this into account, resulting in serious losses and rapid exit from the market.
How not to become a victim of the currency exchange? To avoid becoming her, you need to know her psychology, her way of thinking. In fact, any inexperienced newcomer to the Forex market is a potential victim. Such a trader has not yet developed a correct perception of the market and its regularities, he does not know the consequences of incorrect trading decisions.
As a rule, the victim of the Forex market is guided by the following judgments:
1) It is not necessary to set a stop loss. Almost half of the beginner traders do not use this order, which results in the deposit being drained. At the same time, the reasons why speculators refuse to place stop-orders are ridiculous. It can be banal laziness, lack of time for such an operation, seeming stability of the market situation, control of the transaction.
2) The main thing is to take the profit and let the losses grow. Here is the psychological aspect of trading. A person is characterized by a belief in the best, which is why speculators hope for the miraculous transformation of unprofitable deals into profitable ones. As for profitable trades, novice traders close them quickly so as not to lose their earned money. As a consequence, the loss on one trade may exceed the profit on several successful operations.
3) It is necessary to take full advantage of margin trading opportunities. Victims of the Forex market calculate only the amount of possible profit, but not losses. They don’t understand that the big leverage is the main enemy of a novice trader.
Read more about leverage in the article: “Leverage on the Forex market”
3) If you can’t get a profit on a demo account, you need to switch to real trading. The result of this transition is easy to predict. If the speculator has not learned to achieve a positive financial result on a demo account, then trading on a real account is likely to be unprofitable.
5) The main thing in trading is to guess the direction of the trend. The victim of the Forex market does not suspect how many pitfalls in currency trading. It does not take into account the dynamics of the trend or the probability of a price reversal.
6) You can quickly get rich using the Forex Expert Advisor. It is difficult to find a trading robot that does not allow deposit drawdown or drain. Therefore, this statement is erroneous.
See the pros and cons of automated trading in this article “Automated Forex trading: pros and cons”
In order to stop being a victim of the currency market, a trader must change his or her mind and forever abandon the stereotypes described above.