Emotional Intelligence

The first skill novice traders should master

trading psychology Emotional Intelligence

As a Forex educator, I feel exceptionally privileged to teach novice retails traders the principles that can lead to profitability. This also means I field many questions from ambitious traders, who are hoping to find the one trading strategy that will make them successful. Unfortunately, such a strategy does not exist. Successful Forex trading first requires poise and self-control from the trader in question.

While the technical aspects of a trading strategy are undeniably important, it’s an individual’s ability to manage their emotions, which leads to long-term success.

It’s a pattern I have witnessed many times as an educational Forex strategist. A lack of mental clarity from those traders embarking upon their first year can often lead to the loss of money; which then causes the trader to give up their Forex career at the first hurdle. 

But the polar opposite is also true. I’ve seen many examples of novice retails traders who have approached their early months of trading in a remarkably measured way, which in turn produced remarkable trading results.

Many traders doubt their own ability to regulate their thinking. The good news is that emotional intelligence is a skill that can be mastered. All it takes is a little practice.

The way a trader thinks is everything

Like anything worthwhile in life, trading Forex presents moments of difficulty. Those who are thinking of taking up Forex trading as a career must accept that their emotions will be subjected to an unpredictable (albeit exciting) rollercoaster ride.

So the ability to think clearly is absolutely vital for traders. For instance, when traders experience a bad run of trades, it can become difficult to give the trading strategy the necessary time it needs to succeed. Negative emotions can skew judgment and cause heat-of-the-moment reactions.