New investors in the market allow their decisions to enter and exit trades to be governed by their emotions. Instead of focusing on their plans, they allow their gut feelings to overrule them when trading currencies. If you fall in that category, then you should start counting your days because you are killing your profits.
The Forex market is very dynamic in nature; therefore, you need to have a strategy for placing and exiting your trades, regardless of the conditions. If you have the habit of exiting trades just because they have gone against you by a few pips, then you better find something better to do outside trading Forex. To succeed in Forex trading, you need to develop a positive mindset and stay focused always without letting your feelings rule you.
One major reason why traders make emotional decisions is due to lack of proper training in the Forex market. As such, when they start trading, they just click the buy and sell buttons without a second thought and quit their positions either too early or too late.
Before investing your hard-earned cash in the business of Forex trading, you need to have a solid grasp of how the Forex market operates. This will help you make mature decisions and control your emotions when trading. Importantly, you need to know how to carry out both fundamental and technical analysis. If you rely on one type of analysis, you may find yourself exiting a position when you realize that you didn't do enough analysis. For example, you may quit a trade on EUR/USD (a trade you entered based on technical analysis) just because you didn't know a major news announcement is about to be made.
To learn how to control your emotions, you can use a demo for sometime. A demo account usually has the same market conditions as a live account. Therefore, if you can learn how to make profits consistently in a demo account without the influence of emotions, then you can definitely reap big in Forex trading. You should not fall into the temptation of starting to make money in Forex trading before you try out what you have learnt in a demo account.
The difference between successful Forex traders and unsuccessful Forex traders is one: the former has learnt how to control their emotions. If you want to join the league of winners, it is simple: learn how to control your emotions. Although it may take you time to achieve this, but with consistency and hard work, you can realize it.