Rich with Character: How to Make Adequate Forex Trading Decisions During a Crisis

All crises begin all of a sudden, even if they are anticipated and prepared for. This is precisely what makes them so disruptive. 

For a Forex trader, cryptocurrency market timing is crucial to keep things under control. Many are concerned about achieving trading success, especially in the midst of a global downturn, and making sound decisions during a crisis.

Let's analyze the best strategies on how to stay afloat if you are a Forex trader in a tight spot. 

Focus on the process

Focus on the essence of the trading process, not the profit or loss per trade. At this stage, numerical objectives are not only irrelevant but even threatening, as they lead to mental exhaustion, especially if you're hyper-responsible by nature.

Now your primary responsibility is to adhere to the process and strictly follow your own rules. The numbers are secondary, paradoxical as it may sound.

The main thing is to stay in the flow, systematically take the right actions, and live by the principle, "My task is to trade Forex according to the rules, and the profit will kick in".

A series of small trades is perfect

Avoid increasing your position size without prior preparation. Seasoned traders are aware that a trade with one lot can be more effective than one with ten.

Essentially, with a large trade, the potential risk is greater, the fear of loss is bigger, and therefore, the psychological pressure intensifies. 

To avoid trouble, focus on several small trades rather than one large one. In this case, the psychology of trading should be based on the rule "slow and steady wins the race."

Search familiarity

If you're a novice to trading, recall past experiences; you've likely relived such cases:

• How did you get out of a tangled situation then?
• How did you prepare yourself for entering the market when you had good trades?
• What sequence of actions preceded it?

Mentally rehearse the situation in advance if you're very concerned about the outcome. When you're prepared for the worst, it often doesn't occur at all.

Maintain a resourceful state

Before mentally rehearsing the worst-case scenario, bring yourself into a normal, resourceful state, the one in which you usually trade and achieve the heights.

The point is that a "dive out of a nosedive" scenario doesn't arise in a state of panic. When you're already "diving," you have no time for a scenario. In other words, you should know what you'll do if an emergency occurs before it happens.

This strategy is the rule of thumb to ensure your Forex results are calm, stable, and productive. This is the goal of the entire psychology for thriving trading.

Take it easy

Don't set goals to earn a specific amount on one trade, or to cover yesterday's losing trades with today's. We mentioned it previously: you shouldn't get attached to numbers. 

What's more, influencing your ability to earn as a trader is practically unbelievable. You are only responsible for making appropriate decisions on the spot as well as taking the appropriate actions.

Ultimately, in Forex trading, there's no room for emotions and perfectionism. The initial sign of a perfectionist is throwing a tantrum when a trade yields $75 instead of the planned $100. Let go of inflated expectations about the market before messing up your deals.

Read books on trading psychology

A crisis is a golden chance to refresh your knowledge of trading psychology and reread your cherished books on the topic. Every experienced trader should have their own list of helpful sources at hand.

For beginners, Brett Steenbarger's "The Psychology of Trading" is a perfect choice. The author combines his psychotherapist position with practicing Forex in his spare time.

Therefore, the book doesn't cover pure trading, but it involves great examples from Brett's private therapy and effective tips on how to apply them to the world of trading.

Here's what Brett Steenbarger himself mentions about risk management:

The main focus of the book is learning to listen, hear, and understand yourself. After all, every trader and person has two sides to them, one of which is in sync with the market and allows them to achieve results from hard work.

Big Names who Won from Trading Forex in Turmoil Times

George Soros: A notorious Forex trader with a larger-than-life attitude, he reaped a hefty $8 billion on speculative trades, betting on the decline of the pound sterling.

Bruce Kovner: Earned $6 billion by establishing himself as a passionate trader who makes staggering bets based on his ability to prognosticate economic trends.

Stanley Druckenmiller: A top-notch asset manager, worth approximately $2 billion, who also profited from crises.

Final Thoughts

Forex trading is far from being a bed of roses; instead, it is a bed of nails. By demonstrating a bold character and keeping calm, a trader can enjoy the finest things on their journey without regrets. Busy times can wait, and later, you will thank yourself for your peace of mind.