Forex Psychology – Your Self Evaluation Checklist

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One trait every successful trader has is constant self evaluation. You have probably heard this before but in trading it is an absolute truth: you are your biggest enemy. The following checklist may help you to identify the psychological obstacles every trader encounters throughout his trading career. Take a few minutes to read it, be honest with your answers and re-read the list from time to time. You will be amazed of your progress and will see actual results in your trading account balance.

  1. After a losing trade, do you have an urge to “revenge” and immediately enter another trade just to regain money lost? If so, do losses often followed by further trading losses? When you are in a “revenge” mode, do you tend to widen your stop loss order or to trade without stop loss at all? You will notice that your trading performance is poor when you are upset or disturbed for any reason.
  2. Do you work on yourself mentally while the market is close? Do you analyze your trading activity and try to identify what you’re doing right and wrong in your trading each day with specific steps to address both? Good traders always review their latest trades and analyze them. They even keep a trading diary and write down comments, do and don’t do. It is called business quality control which enables successful traders to change with the ever changing forex markets.
  3. What influence do days where you lacked discipline and/or proper risk control have on your total profit/loss? Do you have and strictly follow risk and money management rules?
  4. What is your state-of-mind while you trade? Before you enter a trade: Are you thinking about the money you will make? Does the trade itself excite you? Savvy forex traders do not think in terms of money while they trade. They think in terms of pips. If you think about the money it means that you are not acting from the right motives. In addition, good traders do not look for excitement, self esteem or recognition in the forex market. They trade to make pips. And in most cases you will not be able to tell whether they had a good or bad trading day.
  5. Do you have any self-talk while you trade? If so, What is the quality of your self-talk? Is it angry and frustrated; negative and defeated or encouraging and optimistic? Is your self-talk constructive, and would you want others to be talking with you that way while you are trading?
  6. Do you exit trades too early just to see the market rally in the direction of your closed position? Do you become stubborn when facing losing positions, turning small losers into large ones?Remember: cut your losses short and let your profits grow. This is a simple rule and a key to success but you will find it very hard to follow.
  7. Do you enjoy trading? Are you feeling happy while you trade or trading is a continuing agony for you? Forex trading is a hard, sometimes tedious work. The revenue might be huge but this work is not for every one. Are you built for forex trading?
  8. Do you spot real trading opportunities and trade them? Or you have the habit of creating opportunities when they are not there? inexperienced, undisciplined traders have the tendency to push the trigger to often and not according to their trading plan.
  9. Do you have a unique trait that gives you an edge over other traders? It might be super tight spreads, fast computer and special tool or an unusual discipline and perseverance. If you are able to identify your special edges and maintain them, you will gradually come close to the top 5 percent of traders who make most of the profits in the forex market.
  10. How much are you willing to sacrifice in order to become a successful forex trader? Think of the time and money every professional had to sacrifice in order to make a living from his profession. Forex trading is not exceptional.

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Source by A. J Abrams
#Forex #Psychology #Evaluation #Checklist

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