EMOTION - OVER CONFIDENCE

Over confidence is simply thinking you’re better than the market or everyone else trading it.

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When you start thinking “I know what’s going to happen here”, or “I’ve seen it before” you need to remember that every moment in the Forex market is unique, traders fool themselves into thinking they know what’s going to happen which leads to adding or doubling positions and moving away from their trading plan, which is a big mistake.

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Over confidence can give you that feeling of invincibility in the market which will lead to a number of silly mistakes like jumping into trades too early and wanting to be in the market all the time because you’re sure you will win.

It’s important that you focus on the “now moment of opportunity flow”. What we mean by this is treat every situation as “unique”, if you’ve won the last15 trades and you think you can’t lose, you’re not thinking about the now moment of opportunity, you’re thinking about the last 15 winning trades and how well you’re doing.

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Mastering your psychology means detaching yourself emotionally from money and the market. You need to have that positive winning mindset where you see the market in an unbiased way and take every opportunity with the flow of the market and know in your head that every moment in the market is unique. Anything can happen. Always review your trades whether you win or lose and note it down in a trading manual because this helps keep your psychology in check and helps control your emotions too.