Dr. Farzad Vajihi said this about the way of thinking in financial markets:
The forex market is a broad term that includes all the emotions of a trader when trading. Some of these emotions are useful and should be embraced, while others such as fear, greed, anger and anxiety should be suppressed.
Market psychology is complex and takes time to fully master. Many traders experience the negative effects of market psychology more than its positive aspects. For example, a trader may close trades prematurely due to fear of losing, or fear of losing may give way to greed.
Fear, greed, excitement, overconfidence and nervousness are emotions commonly experienced by traders. You must recognize these feelings within yourself and try to find appropriate solutions to cope with them. Because if you don’t know how to deal with these feelings, you will lose a lot in this field.
As a forex trader, you need to identify and suppress FOMO as soon as it occurs. But this is by no means easy, so try to trade with money that losing it will not affect your life.
Avoid trading mistakes
It is true that all traders make mistakes regardless of how long they have been in the market, but if you do not identify and correct your mistakes, they will snowball and get bigger and bigger on the way down. Some of these mistakes are: From: trading in multiple markets, not paying attention to the size of trades and using high leverage.
Greed is one of the most common emotions among traders that needs special attention. When greed overcomes logic, the trader tends to double down on losing trades or use excessive leverage to cover previous losses. Controlling greed is very important for traders, so try to control it. Of course, this is very easy to say, but in practice, it requires a lot of control and attention.