Forex on Five Hours a Week: How to Make Money Trading on Your Own Time

Chapter 9. Trading Psychology

Figure 9.1. Know when to recognize if your opponent is likely to beat the stuffing out of you!: 2006 "Fxstreet.com. The Forex Market." All Rights Reserved.

I've talked about psychology mainly in my live webinars and presentations because I've always felt that I need that feedback from traders—new and experienced—to bring out these issues and memories and experiences. There's nothing like looking out into a group of traders and tell a story and see the heads nodding, or the smiles, or the frowns from a shared experience. The details may change, but the story itself is basically the same. Trading psychology cannot be handed down through stories and techniques alone. You have to live it and have gone through it. It has to be from the trenches. I can think of only a few rare instances that I have written about psychology. Mainly my experiences are shared with my sister, who has a Ph.D. in psychology, and she's my sounding board. She's able to dissect what I am telling her and give me insight into what I am too immersed in to see for myself.

My sister is the one that got me to begin differentiating between internal psychology and external market psychology. Unlike many trading psychology discussions, where it's only what I am feeling or thinking, here is where I'll break it down into mistakes in psychology based on the market environment and discuss the bigger ...