Trading psychology means the perception of a trader towards trading, while doing the trade. Many people say that they lose much amount while doing trading, because they do not know the trading-psychology. Trading-psychology means making yourself strong while doing trading, not getting emotional about market fluctuations, controlling excitement and doing trading with a peace mind. Although it is not possible doing trading with a peace mind as trading is a challenging game. Every investor invests lots of money in financial markets to gain more returns. Every one wants to win the game. Generally market fluctuates minute by minute, so every one has fear and greed.
For example: An individual opens an demo trading account in forex market to see, how the market works. While using the demo account, an individual gets excited to the market fluctuations and is totally attracted by the market gains. While using demo account he thinks that trading in the market is the easy way to gain profits. Then the person enters into the real market with live account. After investing in real market, the person gets confused as to when to make profits and develops emotions and fears. While entering in to the real market the person develops many mental tensions, emotions and fear about money invested. If the person controls his excitement, while using demo accounts, he will not succumb to these type of mental tensions. Trading psychology is about preparing our brain mentally to relax, while doing trading.
Knowing about the trading psychology is necessary for all the investors to keep their brain peaceful while doing trading. Trading psychology helps the trader to control his excitement, remove fear and do not fall for greed.