Psychological preparation for success in trading

psichological preparation for succesful trading

Hello! In high gear of the market movements, our intellectual and emotional state makes a real contribution to the forex trading results. If you take the time to think about your trading efficiency, it is likely that you will remember many cases when your thoughts or emotions hindered the productivity of your trading before you made a decision, or because of hindsight, and you know what you should not have done.

According to my observations, many traders usually know what they should do when trading, but they spoil everything. And I think the real challenge is to do what you know and to bring the case to its logical conclusion systematically following your trading strategy. In this article, I will share with you working exercises to increase psychological stability in forex trading.

Forex trading is a mentally and emotionally complex activity. And if you want to succeed, it is important to define your own unique “success process” – to think what you need to effectively trade on the markets. And then, to formulate it in a single system, and train yourself to focus specifically on what you need to become successful and develop your thoughts, feelings and behavior, which allow you to get the best results.

There are many excellent books on trading psychology, but they do not have the main thing – ready procedures for working with the moral state of a Forex trader. To address this issue, I give you three proven exercises that can be used as part of your own psychological preparation for success in trading.

Controlling your emotional state

control emiotion in forex

When we see a first-class athlete misses a decisive penalty in football, admits a double fault in the last set of a tennis match or can not do the right short hit in golf that puts the ball in the hole, and loses a golf tournament, this is not because these players do not have those or other skills or abilities to succeed, but because in these moments their emotional state changes – they are experiencing increased stress, anxiety or fear. Feelings of stress, anxiety, and fear also have a significant impact on trade efficiency as a result of the impact on our cognitive function, reducing blood flow to the frontal lobes. That is why in stressful conditions forex traders often make mistakes in decision-making situations, react emotionally, and then, looking back, ask themselves the question: “What have I done?”.

The ability to manage your emotional state, as well as a feeling of stress, anxiety or fear, can have a significant impact on the quality of your trading decisions and results.

The practical application of the control procedures of your emotional state on a regular basis can help you increase your stress resistance and thus provide you with powerful techniques to manage your well-being before, during and at the end of trading. One of the easiest and most powerful ways to manage feelings of fear, anxiety, and stress is a simple ability to regulate your breathing.

Exercise “Focusing on your breathing”

This is a great technique that you can use to calm down and concentrate on the trade or at the time of its height, and which may help you manage your Forex trading. You can also use it after suffering stress, for example after a losing position, and it will help you to get back in the good mood before you begin trading again.

This technique of focusing on your breathing I took from the Jason Cellcom’s book “10-Minute Toughness”, because of its simple and easy to remember it, and perform. This exercise will take you only 15 seconds and will help you to change your inner feeling.

  1. Take a deep breath with the diaphragm (belly), maximally filling the lungs with air for 6 seconds;
  2. Hold your breath for two seconds, allowing the air (oxygen) to circulate around your body and reach the brain;
  3. Make slow exhalation (as relaxation) for 7 seconds.

The purpose of psychological training: Perform 20-40 breaths throughout the day, what really will fill the brain with oxygen and increase your stress resistance.

How to enter the “Trade zone”

Surely, many of you have read an excellent book by Mark Douglas „Trading Zone”.  So how do you get into the “zone”, the state in which you are most productive, and make right decisions?

You can apply to practice a highly effective exercise that will allow you to focus and give you the opportunity to escape, especially from any negative thoughts that can you acquire from any doubts and fears, because of which you might close the position or move the stop-loss too early.

One of the key aspects of penetration in the “trade area” is the ability to stay in the present time and focus on current events. Practical application of specific skills in the concentration described in this article, will not only help you to better focus your attention and acquire relevant skills, but will also help you to deeply develop the ability to stay in the present, to notice and pay attention to those factors that are crucial for your trading activities, and still be able to avoid the things that distract your attention, and the obstacles that usually lead to unsatisfactory work, frustration and lack of discipline.

Concentration exercise to enter the “trade zone”

  1. Sit in a comfortable place and give yourself a chance to relax.
  2. Start by focusing on your breathing. Concentrate on in- and exhaling. Just focus on the frequency of your breathing.
  3. Continue to concentrate on your breathing for a predetermined period of time, try to do it about 10 minutes.
  4. You will probably notice that your thoughts go behind your breathing. It’s natural, that’s how our mind works. Just focus on your thoughts. Let them go. And then once again concentrate on your breathing.
  5. Repeat it until you predetermined time for this exercise expires.

This is a simple, but very powerful exercise that helps to develop the ability to not only keep your attention but also the ability to turn it on. Two very important skills.

Perform each exercise daily for 10 minutes.


visualisation in forex trading

Perhaps one of the most powerful and useful aspects of psychological preparation of a forex trader is using visualization.

Your every action, feeling and behavior is the result of the activation of neural pathways in the brain. A neural pathway is a connection or system of connections between neurons in the brain. In essence, every pathway is a morphological model for a particular intellectual skill, feeling or behavior. These neural pathways are created and then developed and strengthened through the application in practice and repetition, producing a certain psychological concept, and after a while they become automatic. This is somewhat like a stroll through a wheat field. The more you go the same way, the more you tread wheat, and the clearer and more visible your way becomes.

Neural pathways can be developed and strengthened through the formation of real physical feelings or behavior, or, what is interesting and important, by visualizing this feeling or behavior. The mind at the neurological level can not differentiate between real and imaginary experiences, it is evidenced by studies conducted in the field of neurology using brain scans.

In real life we can understand it, reminding about a nightmare we had. Did the fear that we experienced in a dream differ from the one we felt really? No. Your heart trembled, you feel terrified, your hands grew cold, and your body got covered in sticky sweat. Your body will react as if it actually happened. The use of specific imaging techniques could have a huge impact on the speed of adaptation of your behavior and emotional reactions: using it are appropriate neural pathways.

The use of visualization will give you the opportunity to practice and participate in trading on Forex, even if you can not get access to real markets, thus, accelerate your development. You can use visualization more effectively to cope with the loss or subsidence to overcome bad habits and develop new ones, useful in trading, to implement access and create a sense of confidence to be mentally prepared to trade the markets or contribute to the achievement of your trading goals.

Visualization should address several senses (sight, hearing, sensory perception), better if before its implementation it is preceded by a short-term relaxation, necessary to perform imaging for 5-10 minutes.

Exercise “Visualization of successful trading”

You can use a very simple technique below, take a minute or two to relax, and then read the text. Soon you will be able to carry out this memory exercise alone.

Now take a moment and focus your attention on some of the losses, problems and complex situations that occur in your trading … Now imagine such example … Swim forward in your imagination … Imagine that this will happen to you sometime in the future … What is it? .. Where? .. Sign in to your body and imagine yourself positively and adequately responding to this situation … how you effectively deal with it … Listen to yourself, giving yourself emotionless and useful explanations … Feel confident and able to cope with these situations … restrained and focused … And feel successful in solving/overcoming this problem … analyzing all your past difficult situations of trading.

Instead of a conclusion

Instead of a conclusion

Psychological preparation increases your potential trading results and regularly applying it in practice, you can develop new neural pathways in your brain, which will raise your stress threshold, provide the conditions for the development of various emotional reactions and states, and new desired principles of behavior in trade. Try the presented above exercises in practice.

Take care, Michael