Coping strategies or alternative approaches are well-known to traders across most markets, reflects the mental dynamics associated with trading: a task filled together with risk as well as doubt. Many individuals play the forex market, not for the exciting environment, but for the profitable outcome - or rather likely a useful result. It is a stressful setting filled with many 'ups and downs' moving at highly treacherous speeds. However, as is aforementioned it can be rather lucrative thus making the stress worthwhile; but, if you are not fortunate enough to experience active trading, copious amounts can be lost.
When each of these losses is suffered, it's impossible to be able to recover the lost money. It's at this stage that a person shouldn't just stress about the financial outcomes, but also the psychological effects as many traders have found themselves in psychological distress. Methods to avoid this type of difficulty are known as coping strategies.
One of the most efficient coping strategies or methods is that of learning from one's mistakes. It is a straightforward and old-fashioned way which many individuals have been taught for several years by their parents. However, talking about it and acting upon it are two extremely contrary behaviors.
The first aspect of this strategy is to understand and accept the downfall that has befallen one. Through acceptance of your circumstances, it is easier to identify the incorrect behaviors in the original act and adjust them. By identification and adjustment, one will be able to perform more efficiently with a psychologically sound and amended strategy.
It ought to be acknowledged there are absolutely no 'quick fixes' to the dilemma. To handle this difficulty completely and acknowledging the error is only one aspect of this coping mechanism. To ensure the mistake do not occur again you must continuously apply the gained knowledge to your overall trading strategy.
A second coping strategy which may be considered involves the exchanging of money. When an individual makes profits on the forex market, it is natural to purchase more luxuries and enjoy one's hard-earned wealth. However, when this trader faces several losses some debt may develop as the capital will decrease disallowing for irrational expenditure. A natural remedy and subsequently dealing approach are to end nearly all needless spending and reduce your expenses.
The final coping mechanism worth mentioning is that of the economists 'intellectualization.' Intellectualization is an abstract term which involves the concept of acceptance. It suggests the individuals acknowledgment and complete acceptance of the current negative happenings. It also suggests the individuals understanding there is nothing he can do to prevent the events as they have passed, all he can do is prepare for the future. This thinking strategy has been noted as the most successful when dealing with psychological distress.
Just as there are healthy strategies to assist one in overcoming detrimental psychological effects, there are also unhealthy strategies which cause one to repress any real treatment. These are known in psychological circles as defense mechanisms with the most well-known being suppression and projection.
As can be seen, the forex market can be a highly profitable industry in which to earn some money. However, there is the potential whereby one can cause severe psychological distress to oneself should losses be incurred. If this is the case, there are coping strategies which can be employed to protect yourself, and as can be seen, they are advantageous.
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