Forex Psychology Explained

When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who’s been in the game for any length of time will tell you that.Playing a winning hand depends on knowing your own mind – and understanding the way that psychology moves the market. Anything involving winning or losing large sums of money becomes emotionally charged.


All right. You’ve heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you’ll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info – if it’s math, there’s only one right answer, right?

FX-Waver Rider Software

The FX Wave rider software program produces trade signals that are based on the fact that almost every major “move” up or down in the Forex market is proceeded by an initial "spike" in price. The FX Wave Rider software is monitoring 11 of Marketiva most volatile currency pairs constantly, tracking down such price spikes. The height (value) of the price “spike” acts also an indicator of the "tradebility" of that price "spike", and secondly, as an indicator of "volume" on that moment.

Only when the value of such a price "spike" is above a certain threshold, then the “spike” has enough potential to "move" the market at least 20-30 pips up or down... This would be the least that is necessary for a successfull trade. The program detects only these bigger price "spikes" in the forex that have enough potential to be traded, and a higher probability to be won. It is actually measuring “steam” of the market. Because there is no such thing as certainty in forex, only a higher chance of probability !, it is more logical and profitable to make use of only these higher "price" spikes as an opportunity to enter a trade.

These "trade" signals won’t give you an exact entry, or "take profit" point for a trade. What it will do is... provide you with these” higher probability” moments where the market has the potential to move at least 30-100 pips up or down... or more. The sent signal contains a "deviation" value, which is an indication for the "tradebility" of the signal. The higher the "deviation" value, the better the probabilty chance that such a trade can be won. Deviation scale starts from +,-8 till +,-15 or higher...

Because everbody’s risc profile is different, you can decide for yourself if you want to make use of each sent signal ,or when to enter or exit a trade. In this way you are no longer bound to monitor your screen all day, and watch the market for news and the right opportunity. You only have to wait for Yahoo’s instant messenger "sound alarm" !. Emperical research has proven that there will still be enough of these "higher probabilty" trading opportunities (at least 1-5 a day) to make forex trading in this way profitable.

Forex Trading Tips

The Forex Market

Repetition is the key to success in any endeavor in life, including trading the forex. The more you practice trade, the more you trade real money, the better you get. You just have to keep at it - over and over and over again.

Persistence is the key. You're bound to get better at something if you do it constantly and don't quit. Don't let the market psyche you out. When you have a down day, just treat it as experience. Lessons learned. But, try to learn from your mistakes.

You need to get to the point where, when you look at a chart without any visual aids, you see indications as to where price is going. This has to become "second nature." At that point, you can trade with ease. And, your stress level will go down, because you will be in control of the market, not the other way around. This only comes with practice, day after day. This takes patience, and staying power. You must hang in there until you get it. Winners never quit; quitters never win.

The key is to start by analyzing yourself. Can you honestly say that you are the type of person that can control their emotions and execute trades, many times under extremely stressful conditions, without blinking? Or maybe you are the overconfident type of person who's likely to take more risk than they should. Before you get to the real thing, and start trading with real money, you need to look inside yourself and get the answers.

It is important to get the answers ASAP, before they result in a catastrophe, because it takes only one big loss to impact you enough to stop trading forex (or at least delay your earnings 'till you get an additional capital). You need to be confident in your system, and to have the discipline to stick to your plan. Without a plan you will be trading on impulse, guided by emotions. There is no more reliable way to loose trades than by trading that way.