When someone says the term "Trading Psychology" they are referring to the emotions and mental state of a trader that may dictate the success or failure when trading Forex or any other financial market. This trading psychology is unique to the individual trader. However, in general, it represents various aspects of an individual’s character and behaviours that influence their trading decisions and consequently, the actions they will take in the markets.
Trading psychology can be as important, if not more important, than other attributes such as fundamental, technical and sentiment trading knowledge, experience, and other general skills that are important in determining if a trader will be successful in the markets.
Discipline and risk-taking are two very important aspects of trading psychology since how well a trader will implement them are essential to the success of their trading plan and ultimately if they can make a profit or not. Fear and greed are commonly associated with poor trading psychology. Hope and regret can also be a part of negative trading behaviour.
In the following Wiki, we will explore many aspects of Trading Psychology as well as strategies to help cope with negative trading behaviour. This is a large Wiki so take your time in the table of contents and pick what seems right for your situation.