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Forex Traders Psychology

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To act efficiently on the Forex market, the trader must know how to objectively determine the situation on the market. Selective thinking aids the trader to make the right decisions, not only in auspicious days, but in times of bad luck, when the another person would not be able to make decisions intelligently. Market growth depends pretty much on the actions of its members. Depending on the type of behaviour at a certain stage the players of the Forex market can be classed into 4 groups, they are bulls, bears, sheep and pigs.

Bulls are participants, who deal for a rise on the Forex market, they benefit when the price grows. The name came from the aphorism “take the bull by the horns” – that is, right to bet on the rise and wait for this lucky moment.

Bears in distinction from the bulls bet on decline in rates and wait when the exchange rate goes down. They were called that way due to how the bear beats the enemy – a blow is made from the top to down – therefore the rate for a fall.

The category of pigs includes very rapacious market participants, which are described by much of the thoughtless actions in trading, when they sell or buy very big quantities of currency at the earliest possible opportunity. And, in general, this opportunity of the Forex market development will appear not reasonable and not advantageous for them.

Members such as sheep are very vacillating, they have not or do not trust their own experience or knowledge and depend on the decisions of professionals. Sometimes they can appear in different roles that are in distinctive for them but under restrictions of the least market fluctuation they show their true behaviour.

Professional trader must be able to resist the pressure of the market. All decisions must be made regardless of the hearsay in the market and any events. From whole amount of the information it is essential to be able to sort out really essential and unimportant. Do not rely on the opinions of even the most reputable experts, they can be used only as a part of the information. All decisions of the traders should be independent and they also undertake responsibility for profits and losses.

The Forex market – it is a bevy of different kinds of players. You must be able to hold above this crowd and be able to apprehend its changes. You should remember that the price consists of emotions and wishes of each member on the Forex market, so you should try to consider all these wishes and to feel the market so you will achieve the success.

Before you come to the step of opening your online Forex account, please make sure that you gather as much info about the company whose service you are choosing and the service of opening Forex. Sometimes a good choice is also to open a mini Forex account and do some test trades on small money and see how it works.

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