The psychology of a basis of behavior of people is considered a key to understanding of conditions on financial markets. All typical for the usual person, daily feelings and emotions are rigidly shown in unscrupulous market wars, as an aggressive chemical solution on a paper. Some sensations – fear, avidity, hope are inherent to all people – these feelings render at the inopportune moments, determining influence on psychology and decisions of the trader. The adequate perception of capabilities, positive and negative sides of the person can help to avoid ruin. When you will add to it ability correctly to understand the psychological condition the success on Forex to you is warranted.
Key force which forces us to take part in speculative financial markets, and in general to work is greed.
When greed of the person is insignificant you will conclude very few agreements, missing many fine moments. In this case we advise to you to be engaged in other business, which is not so nervous.
When greed practically has no borders the trader will try to conduct as much as possible transactions, thus subjecting to risk the assets. Better, for example, play a casino or poker, it to you is simply closer at heart.
Result of influence of greed will be per capita the motivation to fulfillment of transactions.
It is possible to allocate 2 types of motivation:
• rational motivation – it, as a rule, is present only before the first occurrence in the market of the beginning trader, and also at activity of the professional trader;
• the irrational motivation of the trader – is expressed in a fuse of the person and there is unconditionally at each trader, all a difference that one can supervise the passion, and it is possible to name others slaves to feelings which are doomed to crash.
The second factor which pushes the trader to a permanent job, the hope of reception of a profit is. Whatever one may do, the sense of any business activity consists in earnings of money. When the hope over cold calculation prevail the person simply risksto overestimate individual possibilities at conditions analysis. The hope is obliged to submit both to calculation, and greed. Just the groundless hope also leads the beginner to ruin.
The hope also determines behavior of the person in 2 basic cases:
• when the person enters into the market. Only the hope of profit reception can force to make the trader any action in the exchange market Forex;
• at the moment of reception of losses if there is a desire to change a situation to the best. In that case the hope passes 3 stages of development.
At the first stage if the trader understands that losses are insignificant, the hope is the normal phenomenon and can be justified without problems.
At the second stage when losses grow, hope to reach peak. During such moment it is improbably difficult to person to separate from hope a situation in the market. The problem resolution entirely depends on self-control of the trader.
For those who want to participate in forex trading should start from learning the basics of currency exchange market to make sure you do not experience problems with this industry.