27. What is the Psychological Effect in Forex Trading?

November 18, 2022
Fear, greed, hope, and regret are the four most dangerous emotions in forex trading. The psychological effect can lead to devastating losses if not managed properly.

Trading psychology refers to all the emotions and feelings that a trader might feel while keeping a trading position in the forex market. It can be helpful but it can also become trouble when it becomes too much and overcomes the trader's senses.

Some common psychological effects that are bad for trading are:

  • Fear: In which traders keep worrying that the market will turn against them and cause their losses, resulting in not opening any position and missing a lot of trading opportunities.
  • Greed: A sense of over-expectation that pushes traders to trade beyond their plan, usually caused by lucky streaks and leads to overtrading.
  • Hope: This emotion comes from too much hoping that the market will follow traders' will without realizing that they can't really move the market. It usually leads to entering the market by gut instincts without any reasonable plan.
  • Regret: An extreme disappointment over missing opportunities in the market. This usually results in overtrading for the next trades as traders affected by this emotion would not want to miss any opportunity even though they break their own trading rules.

Education (46)

1. What Is Forex? 2. Why Does Forex Market Exist? 3. What Drives the Forex Market? 4. Why is Forex Trading Popular? 5. Can I Get Rich in Forex? 6. Are You Curious? Want to Discover More about Forex Trading? Meet Demo Acount! 7. I'm a Newbie, How to Master Forex Trading? 8. What Forex Knowledge Should I Conquer? What Are the Steps to Go Thorugh the Journey? 9. What are Software and Glossaries in Trading Forex? 10. How to Read the Forex Market? 11. How to Practice Forex Trading? 12. How to Ride on the Forex Wave? 13. How to Prepare Basic Trading Requirement? By the Demo Account? What about the MT4/MT5? 14. What is Bid-Ask Spread? 15. What is Pip? 16. What is Lot Size 17. What is Leverage in Forex Trading? 18. What is Margin? 19. When to Trade Forex? 20. What is the Most Dominant Market in Forex? How is the Characteristic? 21. What is Chart in Forex? 22. What is Candlestick? Why is It the Most Popular Chart in Forex? 23. What is Technical Analysis? 24. What is Fundamental Analysis? 25. What are MT4 Indicators and How to Use Them? 26. What is Risk in Forex? 27. What is the Psychological Effect in Forex Trading? 28. How to Compile a Strategy Template? 29. How Long Should You Practice in a Demo Account? 30. When Do I Need to Start Learning about Brokers? 31. What Exactly Does a Forex Broker Do? 32. Can I Trade Forex without Broker? 33. How Much Money Do You Need to Trade in Forex Brokers? 34. How to Choose a Good Forex Broker? 35. What is Regulation? And Why Should Regulation Exist? 36. Why Should You Choose Forex Brokers with Top-tier Regulations? 37. How to Choose Forex Brokers Based on Your Need and Where You Are From? 38. What Brokers Should You Avoid? 39. Is There Any Broker Scam in History? How Bad Is It? 40. What are the Most Popular Brokers in The World? 41. What are the Best Brokers For Entry-Level Traders? 42. What are the Best Brokers for Traders with Minimum Deposit Capabilities? 43. Which Broker Provides a Demo Account and Easy Setup? 44. Which Broker Provides Easy Registrations? 45. What and How to Deposit on Forex Brokers? 46. What and How to Withdraw from Forex Brokers?

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