Forex Psychology


All eyes on ECB
The European currency is at a three-week high ahead of the ECB decision on the monetary policy. The investors are bracing for the last session of ECB in this year, in the anticipation of an extension of the asset repurchase program by the European regulators...
Gold moved higher
Gold attempted to recover on Wednesday albeit remained around 10-month low. The price recovered from 1165 and was able to break 1170 post-Europe open. However, the upward impetus stalled at 1178 where the pair spent the rest of the European session...
Sterling Breaks Major Resistance
Sterling hit a 2-week high of 1.3210 on Tuesday 23rd, from the low of 1.3033 on 22nd Aug, a 1.36% rise. Yet it pulled back as 1.3200 is a major resistance level. It rebounded this morning after tested the support level at 1.3160...
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Yen and Aussie drop further in Asia
On Monday, the Japanese yen kept sagging further during Asia trade along with the Australian dollar. It’s because the greenback gained some wind at its back on policymaker comments from Fed Vice Chair Stanley Fischer hailing the American economy ahead of a speech later in the week by the Fed governor...
The Problem with the Euro - it's a Cultural Thing
The recent problems and the seeming implosion of the euro, is I suggest something, which I have come to the conclusion, is something, which has been looming and brewing up for some time – the past several years, in fact, ever since its inception and “virtual” birth on 1st January 1999...
Peak Performance Trading Tips
Last week I discussed Chapter 12 of the second edition of Trade Your Way to Financial Freedom, talking about how five investors with totally different ideas, including opposite views on what might happen, could all profit from various scenarios...
Using the "ADM" Method to Deal with Losing Trades
A main tenet of success in futures trading is the ability to accept losing trades as part of the overall trading process. This is not an easy undertaking--especially since many futures traders tend to be of a more competitive nature in the first place...
Finding the Best Traders In The World
I was recently approached by a top hedge fund about profiling the best traders in the world. Profiling really refers to finding those psychological characteristics that will best predict success...
When To Quit Your Day Job
I have had many readers through the years--most of whom were less-experienced traders--tell me that at some point in the future they planned to quit their day jobs and trade futures full-time...
Do What You Love
I have a pretty good taste in art, I think. At least, I can go into most art galleries, find the piece that I like the best, and it is usually one of the most expensive pieces in the gallery. I can do that except for abstract art. I remember one gallery in Paris that we went into...
Know When to Fold 'Em
One of my hobbies is playing poker and I can do it for free online. When I visit a casino and play poker, I usually make money. However, when I started to play online with play money, I had tremendous difficulty making money...
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Van Tharp Back-To-Basics Series
If you are a regular student of Van Tharp's work or reader of this newsletter you hear this a lot: You can't trade the markets, you can only trade your beliefs about the market. Let's explore what this really means...
Enjoy Bumping Into Walls
This is a new section featuring Peak Performance Trading Tips. These won't be tips on some hot new investment. Instead, they'll be tips on how you get yourself in the best possible condition mentally to perform at a peak level. We'll be doing one new tip each month...
Behavioral Patterns That Sabotage Traders - Part I
Although I do not maintain a private practice of counseling/coaching for traders, it is perhaps inevitable that traders would contact me for assistance after reading my book on The Psychology of Trading...
Abell, Koppel Discuss Their Profitable Short-term Trading Methods
No short-term trading system is perfect. However, having and using a system is critical for short-term trading success, say Howard Abell and Bob Koppel...
Make An Honest Self Appraisal
If you are willing to accept total responsibility for your investment results, you will realize that you are the most important factor in your trading or investment success. If you have done that, you are way ahead of the crowd...
Hank Pruden on "Behavioral Finance" and Technical Analysis
Hank Pruden’s theory of "Behavioral Finance" proposes that human flaws are consistent, measurable and predictable, and being aware of and utilizing this phenomenon can benefit a trader...
Self-Sabotage Revealed
In my peak performance training with traders, I give a strong psychological slant to the concept of self-sabotage. Self-sabotage typically occurs when one lacks the discipline to act in one's own best interest...
Getting What You Really Want
I used to do an exercise in the Peak Performance 101 workshop entitled "Getting What You Want". The exercise starts out with a question: If you could have anything in the universe, what would it be? Perhaps your answer might be $10 million dollars...
How to Handle a Losing Streak
A trader emailed me a while back, asking for some advice on a good money manager for him. He said he was a "lousy trader" and tired of losing money. I doubt there is one non-rookie trader reading this story who has not experienced at least a small run of poor performance in trading futures...
"Follow-Through"
Patience is a virtue in most endeavors in life, and it's certainly a valuable asset in futures and stock trading. You will many times hear me use the important term, "follow-through," when I discuss significant market moves such as price breakouts or trend changes...
Serious Money
There is an article in this week's news section which is entitled How to Combat Over Trading. It's an issue that I tackle often in this column because it is probably the greatest source of pain for most traders I know...
A Trade or a Gamble?
I love to trade a lot - which is of course a euphemistic way of saying I love to gamble. Although I have been to Vegas more than a dozen times I never laid down so much as a dollar bet in any casino...
Defining A Great Trader
Great traders that we have had the pleasure to know and to be around, on exchange floors and on trade desks, had certain repeatable traits that all level traders can learn, or take something from...
Five Fatal Flaws of Trading
Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit - and more importantly, do it consistently. How do they do that?