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3 Trading, Psychology Lessons, I learned, From, Dr. Andrew Menaker, Trading Psychology, fx trader, forex

Lesson 2: We do not see the market as it is. We see the market as we are.

I asked Dr. Andrew Menaker why some traders keep entering the trades they told themselves they wouldn’t enter again.

In his response, he mentioned: “We don’t see the market as it is, we see the market as we are”.

I was astonished by the idea.

However, when I reflect back on how I performed in trading, I can attest that my view of the Forex market was vastly influenced by how I felt.

How My Preparation Changed My View Of The Market

As much as I want to believe I am a good trader, I’ve had times at which nothing seemed to work. I realized, nevertheless, that the way I show up to trade in the morning has a tremendous impact on the trades I’ll identify throughout that day.

Let me bring an example…

One day, I had scheduled a series of calls in the morning. My schedule was packed, but I still wanted to trade the New York session.

After the end of my 3rd call, I was a bit late in the session and rushed to take a look at the Euro.

When I got to my computer, I saw what I thought would be a wonderful trading opportunity even though I was a bit late on the entry. I decided to quickly place the trade anyway and jump in.

It ended up being a losing trade, and looking back at it, I had no real reason to enter it. I totally missed the point.

Then I understood that by rushing to take a look at my charts after the trading session started, I was setting myself up with the fear of missing out on something, and thus was very likely to enter trades with no real reason.

That’s why an adequate preparation and a routine to calm yourself are essential in trading. They will allow you to see the market in a more neutral way.

Lesson 3: We must learn to deal with losers and also winners.

One other aspect I was interested in concerned how to deal with winning and losing trades.

In the end, we as traders are affected by both winning and losing trades.

While it has been shown through previous researches that we value losses more than gains, Eldad Yechiam, an associate professor at the Technion (Israel Institute of Technology) explains, in his January 2015 Science Brief, that both losses and gains can affect people similarly.

That being said, if we as traders get affected by both gains and losses, something must be done to control how we react to those winners and losers.

According to Dr. Menaker, big winning trades are the most dangerous trades as confidence is built up.

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