From The Free Forex Encyclopedia
Psychology in Forex is almost as important as the money that traders invest in the market. Without the proper mind-set, trading can be intimidating and confusing. Those who lose the most money in the market are those who don't grasp this fundamental truth. Thought is reality here. Emotions have to be faced down and controlled in order to become a successful Forex trader.
It is often easier for traders to say that they can control their impulses, but when profit is staring them in the face, it can be hard to deny the chance for a better life. But it is just as important to stay in the trading game as it is to realize a profit. To guarantee a future in the Forex market, traders need to know how to control their impulses, remain motivated and persistent even as loss stares them in the face, and develop a self-awareness that will intuitively point them in the direction to success.
Scientists are only now beginning to realize the effect of emotions on a person's thought process. It has been found that emotions are “indispensable” components of rational thought. For those who don't have the ability to control their emotions, it becomes more important for them to realize their limitations and make them work to their advantage.