abdulla1 Posted June 11, 2011 Share Posted June 11, 2011 Back when I first started learning about investing, I decided to start from the beginning and read basic books on personal finance as well as "guides" for understanding all of the investment world in a nut shell. Most of these authors were very knowledgeable and informative, but their investment advice was far too conservative for my taste. They would literally write chapter after chapter talking about the differences between conservative investing, which according to them generally yields somewhere around 5% PA, as opposed to "risky" investing which usually meant a diversified stock/mutual fund portfolio yielding (in my mind) only slightly higher averages. What kind of returns can you expect in the stock market? Well they say the market has gone up an average of 10% a year since Adam and Eve. Popular indexes like the DOW and the now more popular S&P500 have always, like real estate, "gone up over time." Now, these market averages are almost worshiped like golden calves. Repeatedly drilled into my brain was the concept that there were hundreds (if not thousands) of fund managers and other "professionals" out there with Harvard degrees, decades of experience, millions of dollars under management, and they were all spending 15 hours a day consuming every single bit of market information in the hopes of beating these golden calves by a few points. What chance did I have? If Dr. Fund Guru Jr. who eats, sleeps, breathes the markets and has more credentials than I have individual hairs on my body can't consistently make 20% a year...well...forget it kid...your chances are slim to none. I guess I'll buy some shares of XYZ fund and accept the scraps off the table from the stock gurus. NOT! The foreign exchange market offers many benefits that the stock market does not have. Most of these have been beaten to death on various forums, blogs, articles, e-books, etc. However, it's always good to reiterate the positive (my own personal reason is last): — Forex offers unprecedented liquidity. With over two trillion dollars transacted per day on the market, it makes filling any buy/sell order virtually instant. That equates to less slippage and more profitability. "Paper trading" stocks vs actually trading stocks is very different, because orders may not be filled in a timely manner. The difference between trading a forex demo account and an actual account is virtually nill. — Forex is available 24 hours a day 5.5 days a week, as opposed to the daylight trading hours of the stock exchanges. — Forex is uncontrollable by large entities. Large net worth individuals, banks and fund managers who throw their weight around in the stock market can often have huge effects on price action. Because of the immense volume of foreign currency traded per day, the market is unmoved by "heavy hitters." Not even central banks can control the Forex market. — Forex offers up to 200:1 leverage as opposed to 2:1 stock leverage. — Forex has no restrictions for selling short, as opposed to the stock market's "uptick" rule — Forex can actually be traded INSIDE of an IRA or Roth IRA account. — Forex gains are taxed at the preferred 60/40 rate, no matter what trading style you use (intra-day, swing, position) as opposed to the tax penalties for holding stocks for short periods of time. The list does go on, but for me the biggest advantage is a psychological one. I know it probably sounds silly, but fear and intimidation can sometimes subconsciously defeat us before we even begin. I don't like the idea of having to live up to, and in a way, compete with "professional managers" who have more knowledge of the fundamentals of the markets than I ever will. It's almost as if Forex, in some way, levels the playing field. I don't have to psychologically compete against anyone's idea of what kind of returns are "acceptable and realistic" and what kind of returns are "pure fantasy." I only have to trade until I can find an acceptable reward to risk ratio, and consistent profitability thereof. The only one I compete against is myself. by Joshua White Quote Link to comment Share on other sites More sharing options...
budado Posted November 30, 2011 Share Posted November 30, 2011 I don't go to school to study forex trading. What I learn in forex trading is all because of my experience. Now how to trade with emotions checked. One thing I learn is to have patience, to have confidence if you trade and not afraid to loss money if you trade. That's for me is the best way to earn in forex trading. It really does not matter how many times you loss. What's matter is how many times you earn every time you make a loss. Quote Link to comment Share on other sites More sharing options...
mesbakh Posted March 19, 2013 Share Posted March 19, 2013 i think psyicological factorr have great impact. we may not deny that. but we should train our mental to increase our trading skill Quote Link to comment Share on other sites More sharing options...
budado Posted June 14, 2013 Share Posted June 14, 2013 if you don't know how to trade then chance are you going to end up getting emotional. I don't think its good idea to keep on thinking of investing money in forex only to end up giving up forex trading also because you can't handley our emotion. Forex trading is all about taking responsibility and that's how we can manage in forex. Quote Link to comment Share on other sites More sharing options...
euro Posted October 5, 2013 Share Posted October 5, 2013 If you know a lot in forex then there are no fear. You only fear cause you are uncertained and lack knowledge but once you know a lot you will have less fear. Fear only come when you have no idea what you're doing. Forex is not rocket science so I do not fear it that much. There are things that are more difficult in life than forex. However, I think we all fear losing our money. Quote Link to comment Share on other sites More sharing options...
surya77 Posted February 8, 2014 Share Posted February 8, 2014 psychological is need in any field like : education, research, working, business, sport and investment. so if you have a solid psychological you also can have powerfull mental to face hard situation. Quote Link to comment Share on other sites More sharing options...
myregister Posted January 7, 2015 Share Posted January 7, 2015 To be honest there is psychological limitation and that is inside of us, if there is no something like this the market will be so stiff. Also i think that psychological limitation is important to certain extent. Where we can reevaluate our trading strategy, and give room for more price movement. Quote Link to comment Share on other sites More sharing options...
pepy Posted June 21, 2015 Share Posted June 21, 2015 To be honest there is psychological limitation and that is inside of us, if there is no something like this the market will be so stiff. Also i think that psychological limitation is important to certain extent. Where we can reevaluate our trading strategy, and give room for more price movement. That is your limit and others have their own limit. How can you said that the market will be stiff without something like this? Why it should be important? There are other important thing such as trading strategy , risk management, hedging or other things that will make us trading well. Also i don't see any correlation with price movement and psychology limitation. Quote Link to comment Share on other sites More sharing options...
myregister Posted July 16, 2015 Share Posted July 16, 2015 Your psychological limitation is actually like how much you can handle being in negative floating position? Before the price is turn back as like you predict, also not all traders become a superman in one day they must through fire and ice first. That is why risk management important here to help us to break psychological limitations. Quote Link to comment Share on other sites More sharing options...
pepy Posted August 27, 2015 Share Posted August 27, 2015 True i sense some right statement in yours, but there are people who are natural born and don't have to go through so many things in order to be able break their limitation in psychology. Getting emotional in forex is easy and how to handle it need more experience from some view degree of skill. In fact still limitation is exist even you already break that @myregister. Quote Link to comment Share on other sites More sharing options...
myregister Posted October 23, 2015 Share Posted October 23, 2015 When you break your limit there will be other limit, still there is psychological limitation but in higher extent, maybe one or two losses doesn't make you down but how about more? Maybe you will feel like a loser, so if you can handle this negative emotion more and more it means you're like someone who doesn't have any psychological limitations. Quote Link to comment Share on other sites More sharing options...
pepy Posted December 20, 2015 Share Posted December 20, 2015 That is what i want to talk about, we are human has limits and so do our psychology limits, if we bear the risk and able to endure it after few days or few months or few years, it will increase itself and allow us to trade with bigger limits, with that trading is easier for us. Quote Link to comment Share on other sites More sharing options...
myregister Posted January 12, 2016 Share Posted January 12, 2016 Yes, it will help us not to mention it will bring another view from ours. We can trade better or even manage the risk in different or unorthodox way. The only way to do that just as you said break the limits. Each people has in fact limits but to break it is possible thing to do. It only requires our perseverance, saying is easy to me but to do that is hard. Quote Link to comment Share on other sites More sharing options...
pepy Posted September 8, 2016 Share Posted September 8, 2016 Well, let me start here that forex has psychological limitation, all traders which i saw their testimonial must be at least once reach the limit, even their psychological control is growing but limitation will be always exist thanks to our human's nature. But i agree with you break this limit is possible even it is actually take much more time. Quote Link to comment Share on other sites More sharing options...
obieze Posted September 22, 2016 Share Posted September 22, 2016 it is not that easy to break the limit just has you said but it is possible to break it,and what i want you to know is that forex is all about learning with this i think you can achieve your goal and make it. you should always give out time for it to be a good trader. Quote Link to comment Share on other sites More sharing options...
myregister Posted November 13, 2016 Share Posted November 13, 2016 @obieze The psychology limit of foreign exchange for each forex traders are different, i mean for me i can trade without much emotions involved for example but there are some people who trade with their emotions involved thus affected the way they judge their current position and also other information they had to take a decision. Quote Link to comment Share on other sites More sharing options...
Vaabum Posted December 4, 2021 Share Posted December 4, 2021 More often than not, emotions really harm the trader. Most often, this is a desire to earn more, which can threaten an unjustified risk. Quote Link to comment Share on other sites More sharing options...
FXOpen Trader Posted December 7, 2021 Share Posted December 7, 2021 On 12/4/2021 at 2:43 PM, Vaabum said: More often than not, emotions really harm the trader. Most often, this is a desire to earn more, which can threaten an unjustified risk. We will need to reduce the Risks that are actually present in doing the trades in the markets. Quote Link to comment Share on other sites More sharing options...
Vaabum Posted December 10, 2021 Share Posted December 10, 2021 Psychology is a very important aspect for a trader. Without this it will be really difficult for a trader. Quote Link to comment Share on other sites More sharing options...
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