Negative psychological factors in trading

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Negative psychological factors in trading

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Trade in the financial market is a very complex process when it comes to the psychological pressure. I agree that the process itself is not difficult, because all that is needed for fix api trading is a working algorithm and the ability to conduct both fundamental and technical analysis. But the whole process is tied up with the capital thus, with money. As we know, it’s impossible to do without losing trades on the market. Each reduction of the capital can “painfully” affect the performance of the manager.

Personally, I believe that psychological factors take half of the success in the work on the financial market. And that’s why they need to be fought with and taken under a control.

I will highlight 5 key psychological factors that negatively affect the work of the fix api trader:

  1. Fear. This psychological factor plays a huge role in the future result. If the transactions are opened because of fear, a large number of profitable entry points will be missed, and deals will be closed even before the take-profit level is worked ( All this as a complex deprives the trader of the possible profit.
  2.  Greed. Likewise, just as fear negatively affects the fixation of the trading results on fix apiforex the greed also affects it. For in this case, on the contrary, many superfluous transactions will be opened without apparent grounds, which will not have a full analysis or will go beyond the scope of the trading strategy. Moreover, greed will also force the manager to close trading operations even before the take-profit level is worked.
  3.  Courage. When several of your trading operations are successful, the main thing is not to give up to courage. 2-3 operations – this is far from complete statistics. Control this emotion, because it only aggravates the probability for losing position and leads to such a moment as a “transfer” of the stop loss level. It is necessary to give time for analysis of the trade operations. What was the reason for achieving the goal? Was it an accident or a result of the effectiveness of your trading strategy? Only after the analysis of transactions, you can proceed with full confidence in the normal trading mode, while not making rash transactions, because the greed will be involved.
  4.  Uncertainty. Before opening an account in the fix apiforex brokerage company, I recommend you to start trading only after repeatedly testing your algorithm. This will create expectations for future results and building confidence in them. Otherwise, you will not know what to expect from your trading and you will not be completely confident in your trading strategy. Trust the statistics. It indicates the formed trend of your trade. As soon as positive dynamic is visible, it is a signal that you are moving in the right direction.
  5.  Excessive confidence. You need to know the boundaries and similar to the previous negative psychological factor, to not rely on your fighting spirit. After all, if you get unprofitable operations time after time while believing that everything is fine and these are single cases, then you will continue to increase losses. Once again, test your trading, and only then go to the real market.

Undoubtedly, if the whole trade problem lies in the inability to counteract these factors, the perfect solution will be to create a trading robot (, which itself will conduct analysis and commit trading operations, because the algorithm is devoid of psychological moments. However, if you overcome these five psychological factors, you will be able to reach the desired level of profitability, and also you will be able to increase your capital. Moreover, if you can control these emotions, this will be beneficial for you in other fields besides fix api trading.

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