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Forex trading is a highly speculative endeavor, which is part of what makes it so exciting — not to mention the possibility of making money by trading on the global forex market. However, not all forex traders walk away successful.

In fact, some traders may even incur sizeable losses if they are not careful. Although there are many factors that contribute to your trading success, nothing is more important than controlling your emotions.

General Guidelines To Successful Trading Psychology

Let Your Winners Run
Always have a predetermined profit target before entering into any trade based on your chosen risk-reward ratio. Do not be afraid to add to your winning trades and always let them run through to the end of a given trend. Secure your profits by raising your stop losses. Never take your profits too early.

Avoid Distractions
Once you have chosen the indicators you plan on using as part of your trading strategy, such as the Relative Strength Index or the Simple Moving Average, do not pay attention to other contradictory indicators. Always do your own research and avoid blindly following hot tips and ideas from so-called gurus and trading forums.

Accept That You Will Have Losing Trades
New traders should always be aware that even the best trading systems have losing trades. This is especially crucial as you embark on your trading journey. You may experience a streak of losing trades at the start, which might prompt you to make changes to your current trading system.

Discipline Is Key
The key to becoming a successful trader is to be disciplined about your trading system. Stick with it and do not change your trading plan unless you have identified a recurring losing trend in the system.

The Traits Of Losing Traders

The reason why some traders experience significant losses while trading forex can often be attributed to their inability to control their emotions.

Many losing traders allow their losses to run because they fear to book a small loss, all while hoping that their losing trades will reverse.
Most losing traders do not allow their winning trades to run as high as possible because they fear that the market might reverse at any minute and reduce their current profits.
Many losing traders become overconfident after a winning streak, where they feel that they can predict the markets accurately, whilst forgetting that the forex market will always remain unpredictable.
Many losing traders over-trade the markets as they feel the need to profit from every single move of a specific instrument.
Many losing traders are on an emotional rollercoaster while trading the forex markets as they let emotions, including greed, fear, and anger, determine their actions.

The Traits Of Successful Traders

Successful traders are typically able to control their emotions through extreme discipline and by sticking to their trading plans. They focus on the technical aspects of trading instead of just thinking about the profits they could make or the losses they could incur while trading.

Successful traders do not stare at their trading screens the entire day. Instead, they do their research, identify suitable risk-reward setups, enter their trades, and then wait for their trades to play out.
Successful traders always ensure that they have set their stop losses at the appropriate level. This applies to their take profit levels, too. This minimizes their emotional attachment to each trade.
Successful traders accept the possibility of losing trades and are comfortable with this fact. This ensures that they do not hold on to losing positions for too long.
Successful traders are always cautious while trading regardless of whether they are winning or losing. They understand that excess excitement — or fear — can lead to them missing crucial trends in the markets.
Successful traders usually avoid trading based on their emotions as they ensure that all their decisions are backed by sound technical analysis aligned with the key fundamental drivers.
Conclusion

The key to a successful trading psychology is to control your emotions by always exercising caution, sticking to your trading plan, waiting for the right conditions before opening trades, and by continuing to learn about the markets.

Always focus on your trading system instead of the money you want to make, and always be ready to get out of losing trades. Never add to losing trades. Instead, make a practice of adding to your winning trades.

Apply these principles for yourself by opening a trading account with Exness.