Six Psychological Pitfalls in Forex Trading

1. Subjective Dogmatism
   Every trader in the forex market has their own beliefs, assuming certain events will or won’t happen. However, subjective assumptions and rigid dogmatism are major pitfalls. The market is singular, and price movement follows only one direction—"the market is always right." If your view conflicts with the market, you should analyze your own mistakes instead of insisting the market is wrong. Staying objective is crucial.

2. Repeating Mistakes
   "Self-awareness is a virtue." Continuous improvement comes from analyzing one’s own errors. When successful, people often credit their own brilliance rather than luck. Yet, when they fail, they blame bad luck, avoiding accountability. This leads to repeated mistakes. Successful traders face reality, identify causes, learn lessons, and take measures to avoid recurrence.

3. Stubbornness
   "Among any three people, there is always a teacher." The forex market is volatile, and seeking advice from others is invaluable. Learn not only from successful traders but also from failed ones—"history repeats itself." Today’s failure of others could be yours tomorrow. While success offers good experience, failure provides painful lessons. Avoiding failure is often more important than chasing success. However, learning doesn’t mean blind acceptance—"adopt others’ strengths to compensate for your weaknesses" is the best strategy.

4. Mind-Action Discrepancy
   Some traders set plans and strategies but are swayed by external factors once in the market. Forex trading requires not only monitoring market trends but also staying updated on local and global political and economic conditions. Combining fundamental analysis with technical analysis helps seize timely buy/sell signals, ensuring disciplined execution.

5. Herd Mentality
   In forex trading, the majority isn’t always right—it often contradicts the contrarian theory. When everyone rushes to buy, the market peaks; when everyone panic-sells, it bottoms out. Followers usually lose money. Breaking free from herd mentality brings the joy of "finding serenity off the beaten path" and the pride of "being sober while others are drunk."

6. Investment Impatience
   Some traders can’t tolerate holding idle capital and jump into trades hastily. Chasing unrealistic gains often leads to "buying high and selling low" due to lack of patience.

Ultimately, these pitfalls are self-inflicted. Staying clear-headed and unaffected by others renders these traps insignificant!