Although it is important to learn the technical and fundamental skills for forex trading, it is also equally crucial to study the trading psychology.
To become a forex trader, a specialized training from a recognized university is not mandatory. Research has shown that there is nothing exceptional done by the scholars holding a college degree. You must have heard about the collapse of LTCM. Robert C. Merton and Myron Scholars, two Nobel Prize winners, whose theories were considered as gold of the Economics, were not able to save the company from a collapse. This happened because of human emotions like greed and fear, the power of the mind to reason and make rational judgments and calculations was lost. And to top it all leveraging of positions made matters worse.
As these two Board of Directors were the guru of economics, it is clear that their expertise was not the cause of the collapse of the company. So want were the main culprits? The answer is enthusiasm, overconfidence and a careless attitude to the risk control. You can call these factors as emotional faults. It is crucial that you understand these emotional problems and to make you understand it very well, in the next two chapters, I will introduce you to four demons of forex that ruined the careers of many starters through their lies and deception. The harm done by these demons can even surpass any fault done in the analysis or neglect of relevant information. However, the marks of economic mistakes can be healed with time, but the damage done is difficult to vanish.
You should keep in mind that it is hard to win a battle with these demons (which I am going to put forth in the next chapters), but a trader who can put a control on his brain by mastering the psychological aspects of trading has already covered two third path to becoming rich. The remaining one-third is just patience and study. In simple words – To reap the fruits of forex trading to the fullest, you need to keep a control on your mind and put the knowledge in a right direction.