Trader's Psychology

What does psychology have in common with forex? Many people consider trading as a sort of exact science, something like maths or, at the very least, arithmetic rather than something as subjective and fuzzy as psychology. The truth, of course, is quite different. In order to be successful in forex trading, it's not enough to learn the basic concepts and processes related to the forex market. Any newbie will sooner or later (usually, later) do that. No matter how many books and articles on forex get published every year, the ratio of losers versus winners is kept at about 95 to 5. Why is that the case? Self-confidence and guts Relatively few are those traders who have realized that in order to consistently make money they must control their emotions and behavior. You need to impose on yourself strict discipline, follow your strategy and stick to your money management rules. Without reasonable money management, even the best trading strategy will not help you avoid the "margin call event". And you can't reasonable money management without discipline and patience unless you use software for automatic trading (the so-called Expert Advisors), but even then you could get tempted into manually closing a position before it reaches your predefined exit criteria.