It is said that the psychological challenge makes up 90% of the struggle in achieving consistent success as a Forex trader. Can this really be true?

Yes and no. Many great traders that have written about their experiences have talked about how their own inner psychological struggles have caused them losses, even when they “knew” that whatever it was they were doing was wrong. There can be no doubt that psychological factors are of huge importance in the game of trading Forex or speculating in anything.

Mastering your trading psychology won’t make you money in itself, but if you are not aware of the tricks your own mind is trying to play on itself, you will probably find yourself losing even if you are a good trader and are basically right in your trading decisions. There are a hundred ways that a trader can quietly sabotage him or herself. There is a “physical” aspect to trading.

Hopefully it will help you in your trading journey to be aware of several tricks traders often get themselves caught up in psychologically. Sometimes you just have to experience something yourself in order to learn from it: nothing teaches like direct experience. Hopefully some of these points will either give you a new understanding of trading mistakes you have already made, or will warn you in advance of mistakes you have not yet made. Try not to blame yourself when you make a trading mistake: get your “revenge” instead by learning your lesson and not making that mistake again.

Common Mental Trading Mistakes-Not Believing in your Methodology

It is surprising how many people trade without being convinced they can make money, or at least sure that they have a good chance of it. Even if you think you do believe in what you are doing, are you sure you don’t have big doubts hiding just beneath the surface? The answer to this problem is to test your methodology. For example, if you follow trends, take the time to back test on a lot of historical data. Does it show good results most of the time? Is it based on a solid concept, like mean reversion, or momentum? If the answer to these questions is yes, you should believe in what you are doing and don’t forget that you believe in it either.