How Psychology and Stress Can Destroy a Forex Trader

By Jim Buhs

Just having technical and fundamental knowledge of the forex market is not enough to guarantee success. One of the biggest obstacles that any trader faces is the psychological fear that trading can bring about.

This genuine fear of having to take a loss, which makes unsure traders question the way they see the market. The overconfidence in believing 100% in your forecast has caused so many forex traders to completely blow through their accounts. If any a trade has a trace of an ego attached to it, it's a recipe for success. A trader should never feel as if they are controlling the market in which they are trading. It can, and sometimes will go against you. The moment someone can accept that, the more successful the trader will be. Being certain that you are right only leads to holding a trade longer and have a fear of cutting your losses.

After the loss is taken, the inevitable always happens: The blame game. Traders blame themselves, the markets, their broker, their computer, etc... Instead of moving on and realizing even the greatest market traders of all time had to take their lumps, this blame manifests into a dark cloud that is always hovering around them.

Every possible trade taken from that day forward is an unsure action. In the back of their mind they are thinking "this looks like a good buying opportunity, but that's what I thought last time. Well, I don't want to risk it so I'll pass." Even though they know that the trade has a very good chance of working out, but they are so scared from what happened with the last trade, that they just can't pull the trigger.

A great way to overcome this is to get a real understanding of the market. Sure you are going to get the occasional loss, but that's just part of trading. If a person can't deal with a loss, then they should not even thinking about opening up an account. But if a trader can understand price action and price movement, and what causes and effects of that, then they are a step ahead of most traders.

Fear and uncertainty can destroy trader's career before it gets a chance to take off. Make sure to check out my squidoo lens Also, to see more unbiased forex reviews, go to LearnForexDirectory.com.