The mind is the most important thing when it comes to forex live trading because it can be safely assumed that you have already received the right forex training from forex trading courses and have even practised on demo accounts.
Thus, the only thing that can hold your forex live trading profits back now is your own mental limitations which would prevent you from being objective in the forex market.
Self-awareness goes a long way in recognising your mental limitations and pre-empting their effects. Here are some common mental limitations that traders have that should give you pause for thought.
Impatience with Orders
Forex live trading is all about consistency. This consistency comes in the form of doing the same thing again and again in the same manner as the first time it was done. However, this repetition can sometimes become too much for new traders who try to jump the gun and take shortcuts where they can.
Unfortunately, this proves to be their downfall because even though forex trading is about repetition, each step in the process has a defined purpose. Gaining more experience will show you how important each step is in the big scheme of things.
Hoping for Losses to Turn
One of the first things that you will learn about forex live trading is that the market ebbs and flows. This means that if the rates are moving down then they will move up later and vice versa. Every new trader learns this but some traders misunderstand this.
When their trades are in the negative they think they can leave them open up until they turn around. However, sometimes the trends are extremely long and such positions can end up causing a margin call.
Exiting Too Soon Due To Greed
Like losing positions can incite emotions in you, winning positions can do the same as well. When positions are well into profits, many traders panic and close the position simply because of their fear that they will lose what profits their positions have already accrued.
While there is nothing wrong with this, exits from the forex live market should be based solely on technical analysis of the market as opposed to emotions like fear.
Getting Excited and Overtrading
Numerous traders also get caught in the trap of overtrading mainly because they enjoy the thrill and excitement of forex live trading so much. Overtrading, in the majority of cases, takes the form of numerous trades being placed in the market at the same time.
In other words, when potential trades are not assessed carefully and positions are just opened without an evaluation of their merits, the trader can be said to be overtrading.
Second Guessing One’s Decisions
New forex traders tend to lack confidence in their abilities even if they are generally confident human beings in life. This lack of confidence often results in them second guessing the decisions that they make towards forex live trading. This not only results in a lot of time being wasted but also potential profits being lost.