Trade Gold Trading

Psychology of Trade Market

The explanation why 90 % of traders lose can be summed up with two words:

XAUUSD Psychology

Many people fail on the trading psychology front and only a few take the time to transform their mindset. The reason why most people make losses isn't that they can not beat the market, but because they don't have the right mindset. Gold psychology is all about transforming your mindset.

In XAU/USD, you must first master your method and then put in many hours of studying how the market works.

The market is too complex & there are many factors and aspects that have a huge impact on daily fluctuation of market prices. Traders should understand how the online market works through studying trend characteristics and also how these fluctuations and oscillations occur.

Psychology & Emotions

In the market, winning is a matter of the mind. Studying the psychology of the market takes into account what influences others - including the mass psychology of the people that trade gold on a daily basis. Anything involving winning or losing large sums/amounts of money becomes highly emotionally charged. Winning depends on knowing your own mind and also understanding how mass trader psychology moves the prices.

In most cases when traders invest in gold, they invest more than just money - they make an emotional investment. This is where most go wrong; being right becomes more important than making money. When the transaction goes wrong since they have already made an emotional investment they let their decisions to be ruled by their emotions and they hold on to their losing transactions on the hope that it'll bounce back. Unfortunately their losses become greater and they find it even more difficult to close their gold trade orders.

Even when traders make money & let their emotions get in the way, they either become greedy or overtrade.

Gold psychology will form a good foundation for profitably - it is about learning how to keep emotions out of the picture, & not to letting these emotions control your trading transaction decisions - trader behavior changes very little with time, as humans will always make the same mistakes over and over again.

You as a trader can learn how to control the three3 most unproductive emotions which tend to cloud judgment and cost you profits. These three emotions include:

  • Greed

  • Fear

  • Hope

Six Tips for Transforming Your Mindset

1. Define your goal.

There are many important Gold questions that you need to answer before jumping into the xauusd market. Making and defining agoal will give you a start point to your success.

2. Keep it simple.

Some people use more than 5 indicators on one chart analyze and to inform them of their next move with no success or even breaking even. The thing is that more indicators don't equal more accuracy.

The 3 most powerful tools to use are:

  1. Candlesticks (buyer & sellers behavior),
  2. Gold Price action (such as support & resistances), and
  3. Gold Trendline (up, sideways or down).

3. Do not get emotional.

If you are attaching emotions to your gold trades because there is real cash involved you need to change your trading mindset and start following your trade plan. If you're a beginner with no previous experience always begin with training and learn until you begin earning and making profits on you Gold demo account before investing your trading capital.

4. Nothing wrong with break even.

Not all your trade positions are going to be winners. It's better to break-even than to lose. If you know that a transaction has turned against you don't begin praying for a miracle hoping for the market trend to reverse instead cut your loss & move on. There are many other market trading oppourtunites to for a trader to trade.

5. Speculation is your biggest enemy.

Don't speculate on where gold price maybe heading. Always use your charts and your trade plan and study the gold trend before opening a transaction. The trend is your friend, so make good use of it by following the price charts.

6. Do-not allow your winning orders to turn against you.

If you have an open winning transaction at hand don't allow it to turn against you. It's better to place and set a stop 5 pips above the entry opening point and break-even/or win little than to let it turn in to a loss.

For how to utilize these trading tips look at the Gold plan guide: the section about this is illustrated and shown below.

How to Transform Your Psychology and Mindset When Trading - Trading Psychology and Trading Mindset

Psychology Section on Gold Plan

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