XAUUSD Psychology: How to Improve Tips

Never pick bottoms & tops

Some traders are always trying to pick top or bottom.

These people want to sell at the top & buy at the bottom of the market even before the market has reversed. Those who try and pick these market turning points are never accurate, their trade positions mostly moves against them only for them to get stopped out just before the market turns. It is always better to wait and open a trade position after the market has turned than try & predict before the market has turned.

Although there's always a turning point for a trend, no one can predict the exact high & low of the trend. The high & low is formed by the market forces.

Never Average down

Some traders keep buying when price falls lower so that to neutralize the loss once the market trend starts heading in their trade direction. This never works because generally, when price starts to move in a particular direction it mostly continues in that particular direction for a period of time.

The idea of buying against your first position to offset its loss gets more complex once the market begins moving against your second trade.

When you need to open several different trade positions just to erase the first initial mistake, you are entering new trade positions not due to your analysis, but to save your losses which can be easily avoided in the first place using stop loss order.

Know When To Trade & When Not To

A good trader simply understands that - there are times when it is much better, much beneficial to be in an all cash position watching the market from the sidelines. For a trader, Knowing when not to trade is just as important as knowing when to(trade).

You can trade just one day of the week and make a profit or 5 days in a week & make a loss. It's all about following your trading strategy. If there's no signal to trade then do not open any order that day, it may mean the difference between keeping your account balance the same or making a loss on that day.

Do-not fall in love with your trade transactions

The market does not care which xauusd instrument you buy or sell, & the market is always right. Don't marry your orders, the reason why trading with a trading plan is recommended is because most of the objective analysis is done prior to a position is executed. Once a trader is in a trade they tend to interpret the price movement differently in the hopes the prices will move in a favorable direction instead of looking objectively at the factors that might have turned against your original analysis. Those with a losing trade position tend to marry their position, which causes them to disregard the fact that all the signs point towards continued losses.

Never over trade

Over trading is a common mistake. They open high leveraged trade positions - by opening large xauusd positions than what their account balance can allow.

Leveraging your account too high by transacting far larger positions than before puts you in a very vulnerable position leading to bad decisions. Always limit your leverage to less than 10%.

Remain emotionally detached from the market & the excitement that its movement creates.

Don't let your emotions rule. Always be objective with your decisions.

Do not constantly check prices all day long unless you are scalping. If you get caught up in tick watching then you are going to make the wrong decisions based upon greed or panic.

The truth is that many traders know it, but in the actual trading, they actually repeat the same mistake, they keep opening new positions that are against the trend in order to lower the average price. The result is that the first open position and all the others that are newly opened all continue moving against the trader.

Xauusd trading can be unpredictable. Sometimes even experienced traders fail in XAUUSD. It does not happen due to lack of knowledge and experience. Traders who spent several years do have knowledge & experience. Sometimes they fail due to greed & disrespect to psychology.

This science of XAU/USD psychology is very important both for beginners and seasoned traders. Psychology teaches you as a trader how to master trading emotions. When you're in an angry mood you forget about everything that you trained for. You don't mind about the economic indicators. You forget all about the market forces. All that you remember at the heat of the moment is that you as a trader need to earn and make money(FAST or Is it FASTER or Is it Fastest or Is it FASTER FASTER). But you totally forget about market analysis. When you're too excited(over excited, maybe after making a winning trade) you can't make reasonable trading decisions. Thus, you open new trade positions not because your xauusd trading strategy suggested so but because you as a trader want or is it need to become a XAUUSD millionaire. Some traders picture in their minds cars and houses - big mansions that they will buy after getting big wins that mostly never materialize.

The Psychology of trading is a subject not often discussed and dealt with. Traders usually keep themselves busy in finding a system or strategy that works for them. Finding the right trading system is indeed important, however, understanding the psychological aspects & barriers of xauusd should not be neglected.

Stick to a strategy to block out noise caused by shortterm factors & aspects that can affect long-term profitability. Look at what the trading charts are telling you, the market is always right, never ignore what the trading charts are telling you. Finally back test & refine your analysis of charts to improve your trade strategy.

The Psychology of Gold is very helpful in controlling emotions. Emotions are powerful forces in any investment market. This is why traders should have a good tradestrategy.

A good strategy/system will consistently produce profits over the long-term if properly followed, so be sure to control your emotions, do your homework, and stick with your plan & the pieces will fall in place.

How to Improve XAUUSD Psychology with These Easy To Use Methods and Tips

Trading Plan - XAUUSD Psychology Section

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