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FX TRADING PSYCHOLOGY by Akil Stokes


“Patience Pays…Literally” How to Avoid the Markets Traps


Despite being “traders”, finding trades should not be our main objective. The main goal should be to perform analysis and if done properly and consistently, good trading opportunities will fall into our lap. Attempting to “find trades” typically results in the trader finding themselves with a smaller account size. Here’s why.


Te human brain is programed to assess a need and then create solution to fulfill that need. Terefore, when convincing ourselves that we “need” to find a trade, subconsciously we are forcing ourselves to see something that might not actually be there, or at the very least see the markets with a skewed perception. Allow me to ask you this; Have you ever gone food shopping on an empty


62 FX TRADER MAGAZINE October - December 2017


stomach? What happens when the hungry food shopper enters the store is that they immediately begin to purchase everything that meets their cravings, resulting in an abundance of food that they don’t need and larger than expected bill. As traders, our results are similar as confirmation bias starts to play a larger role in our decision making. Because we “want to trade” therefore “we will trade”


and all of a sudden opportunities that we wouldn’t (and probably shouldn’t) have noticed before, suddenly become crystal clear and appear very appetizing. Here’s an example.


On the 4-hour chart (see chart 1) price action has recently completed a high momentum bullish move, followed by a sideways period of consolidation. Tis


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