Psychology Of A Market Rally

Trading Forex is about more than just knowledge of technical computer programs. Trading is an art in itself. Even with a great knowledge and understanding of the market, you can constantly lose. There are no guarantees for success with forex trading. It may go wrong. But at the same time there is a good opportunity to get a great return on your investments.

You can have an expectation that the market will go up and you trade forex. Instead of getting up to the market, start moving down your stop-loss to close your trade. The next moment you see that the market begins to move up, the way you analyzed. You end up with a loss in the earlier trade, and now you are worried about buying again, even if you still have the feeling that it will continue to move up. It is moving up and now we are just frustrated that we do not take action to enter the market and also unnecessary losses (because we put a stop-loss in the previous trade. We just bought a bigger position To make up. This time we put the stop-loss too far. The market had already moved up quite a bit and as soon as we bought it led to a free fall. Our stop-loss was too far and Oooops!

The feelings, fears, greed and many times addiction to trade can just kill what we have in terms of market knowledge. Psychological factors and emotions greatly affect performance and thus results due to the dynamics of the market. When we talk about psychology, it's about both, a lot of psychology, like the trades around the world and our individual psychology.

This is how a average greedy traders mindset in a rally looks like.

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