Does Listening to Your Own Instincts Help You Become a Good Forex Trader?
When it comes to forex trading, we often mention that making sound decisions in trading and getting rid of emotions when trading is most important.
What if your instincts are telling you something important but you quickly disregarded it, and later on when you checked the charts again, you realized that if you listened to your instincts earlier, you would’ve made a big profit out of it? However, this could go the other way around.
There are many ways how our own instincts react to the market depending on the habit that we incorporate in our daily trading. Our body is adopting to the environment of forex trading and how we analyze a currency depending on how much time we allocate in practicing our trading strategies and the time that we study and learn the markets.
But where do this “instincts” come from really?
Here, we will talk about some factors that affects our instincts which can help us in our trading set ups.
Assess your health
We all know that forex trading is stressful especially when our trades are going against us. Having an unhealthy body with unhealthy habits such as lack of sleep, excessive intake of junk food and everything out of the norm can leave you distracted and chances of making wrong decisions and typographical errors such as putting in the wrong lot sizes is more likely to happen.
Just like any job, if you are unhealthy or feeling sick, it will most likely affect your performance at work.
If you notice some signs of being unhealthy and you realize that it’s starting to affect your trades negatively, it’s time to do something about it such as changing your personal habits.
You don’t have to go on a vegan diet or go to the gym every day. You can start by getting enough sleep and having a balanced diet and do a little walking exercise or any cardio before starting your day. Starting your day in Forex with a healthy body and sound mind helps you focus better in making trading decisions.
Assess your trading environment (trading desk/office)
Being a consistent profitable trader is not just all about the strategies, knowledge and trading psychology. The environment of a trader also affects his performance. Some traders like to trade with a minimalistic computer table and jazzy music on the background to help them relax, while some like it quiet with multiple monitors. It really depends on the trader’s preference.
Is your trading area comfortable? Does it help you trade with a sound mind? Do you have a proper posture when sitting on your office chair while making your trades?
You may not know it, but your environment is one of the biggest factors to your success. Make sure to find out the type of trading space that you like and minimize your distractions as much as possible.
Our emotional state reacts to our trading decisions
Our emotions are one of the things that is very hard to eliminate in forex trading. We are taught to always make trading decisions based on the strategy and analysis that we are accustomed to.
However, our emotions can sometimes help us in making those decisions justifiable. When you are making a trade, is there a certain sign such as muscle twitching, sweating, changes in breathing pattern when you’re about to spot a high probability trade?
There may be also other signs that you feel when you shouldn’t take a trade such as biting your lip or having second thoughts. All these signs vary from trader to trader and you are the only one who can notice this.
The next time that you are making an analysis or making a trade, you can try to spot these signs that your emotional state and your body tells you. You can use this as a tool to your advantaging in forex trading too.
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Information on this page is solely for educational purposes only and is not in any way a recommendation to buy or sell certain assets. You should do your thorough research before investing in any type of asset. Learn to trade does not fully guarantee that this information is free from errors or misstatements. It also does not ensure that the information is completely timely. Investing in the Foreign Exchange Market involves a great deal of risk, resulting in the loss of a portion or your full investment. All risks, losses, and costs associated with investing, including total loss of principal and emotional distress, are your responsibility.