Psychology is the study of all aspects of behavior and mental processes. Our psychological behavior definitely has an impact on trading because a lot of people tend to make decisions according to their emotions and mindset. Often, it is psychology, not a lack of academic knowledge or skill in application, that is considered to be primary originator of trading mistakes.
Most traders are aware that psychological factors are important factors in trading. Knowing psychology for trader’s behavior will allow you to be ready to most of biases and decide from the fact that are presented. Most people experience similar thought and emotions as they trade in markets and we can learn significant things form difference between thoughts of losing traders and winning traders. It is definitely not the right way to think that being successful in the forex market entirely depends on the system or strategy you use. Because it depends mostly on your mindset, how individuals think about and how you react to the market. However, Forex websites that are trying to sell robot-based trading system won’t generally tell you this, because they want you to believe that you can make money by buying their goods. It is the mindset that they want traders to have. Having an effective trading strategy is very important, which also includes how you manage your trades correctly and your emotions correctly. You have to develop such control of your emotions to be able to trade whilst eliminating emotional decisions. If you do not properly control your mind, you will have a minimal chance at making consistent profit in the market, in fact, you are most likely to lose money.