Aggressive Trading Psychology: Exceptional Trading Guide 2021

what is aggressive trading psychology forex

The aggressive trading psychology of traders is a forex trading style where investors focus on both weak and strong levels to take advantage of the stronger levels. Aggressive traders choose to enter either both the levels or trade-in strong levels to earn profits. The trading style has risk and profits at higher points, with multiple transactions and averaging the trade. Moreover, aggressive trade requires more entries and the margin requirement, therefore, is higher. 

Aggressive trading means executing the trade in a determined and forceful way. So, traders have to be consistent with the trading and strategies they use. Although it can not be reckless trading, planned and analysed trading is the key to success in aggressive trading psychology.  Some of the best forex trading strategies

Before getting into details of aggressive trading psychology, it is equally important to understand the forex market. The knowledge would make it more convenient to trade with aggressive psychology in the forex market. 

What is the Forex Market?

Forex stands for foreign exchange market where international currencies are traded on global decentralised or over-the-counter (OTC) methods. Foreign exchange rates are determined in the market. The currencies are purchased and sold in the market to determine the prices. It is the most liquid market to trade in globally. There are currency pairs that are traded based on the base and quote prices in the market. Traders invest in the currencies in various manners such as futures contracts, forward contracts, spot contracts, CFDs etc. 

Forex market is available twenty-four hours a day and five days a week; thus, traders can enter and exit the market whenever they feel like it. Traders can even speculate over the currencies to earn high profits. However, the market also carries significant risks and requires knowledge and experience for trading. 

Major forex market pairs include EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, and AUD/USD. 

Trading Psychology

Trading is a complex field where the pitfalls are more than the possibilities to earn. Active traders of the market find it difficult to trade due to the uncertainties and fast-paced environment of the trade. With 80% chances of loss and 1% profit, it is quite a risky adventure to trade. But still, people invest in markets for extra earnings, financial independence, self-empowerment and career-related issues. All these factors and maybe many more attract traders to invest in the market. 

Trading psychology is not easy and has various challenges for traders. Along with these are the psychological factors of the traders that make them act in specific ways—the emotional factors being the most active ones: these impact traders decisions and their style of trading. 

Traders depend much upon the psychological factors, even if they achieve the desired success or not. Managing emotions while trading in the market is a task. The most critical aspect of trade performance is controlling emotions. Fear and greed being the two most influential factors of emotions; these two influence the market performance of the traders. The automatic emotional burst out decisions of the traders could be risky for the trade. Therefore, traders have to control these emotional turmoils to be successful. 

What is an aggressive trader?

Aggressive investors of the market are those who are willing to take higher risks to maximise profits. But, then, some truculent traders are comfortable in taking larger reductions for the extra future capital gains. The aggressive traders carry specific characteristics that make them stand different from other traders. These are: 

  • Traders or investors are open to higher risks with the use of leverage ratio and trading on high positions in the market
  • Aim to have quick and high profits via day trading
  • Seek to have aggressive returns in the market
  • Follow a consistent style of trading
  • Focus on the strong and weak levels of the trade 
  • Wait for opportunities to earn high returns

In contrast, when we compare the aggressive traders with the conservative traders of the market, the conservative traders are risk-averse. The traders invest in a more balanced way and avoid high-risk investments. Thus, aggressive and conservative traders differ in their risk-taking and the investments they choose to trade. 

Aggressive traders are a bit more risk-taker and indulge in investments they feel would make them earn in the future. Therefore, they take risks and earn as well, even if they have to face drawbacks sometimes. To be an aggressive trader, one has to be knowledgeable and understand the market tactics to get higher returns. 

When does aggressive trading psychology work the most?

Trading and speculation in the market are inherently risky, even though an investor uses the best of the aggressive trading strategies. The market conditions and lack of training of the traders affect aggressive trading. As a result, traders cannot grow their capital and earn good returns for their high investments. To overcome these situations, traders have to judge the market conditions correctly to take risks. 

Traders of aggressive style have first to consider that they are supposed to take high risks and be prepared for the big losses. Aggressive psychology works because risk-bearing traders enhance their portfolios by moving ten steps ahead and five steps backwards. The aggressive trading strategy differs from other trading styles and requires a lot of courage. Other trading styles move a step ahead in their investments with low risks. However, the market is the same, but the style of trade is opposite. 

The style of trade and the strategies used differs for every trader, and as per the market conditions, they trade in. For example, a trader prefers to trade in a balanced environment with fewer risks and more calculated decisions. On the other hand, another trader prefers to invest in a volatile market, so the trader risks more. As a result, the traders are a bit fast and accelerated in their market strategies compared to the other traders. 

Therefore, we can say that no one strategy works for the market; traders have to use various trading approaches as per the market conditions. 

Aggressive Trading psychology Strategies

To optimise the benefits and trade opportunities of the investors, aggressive trading is the best option. Although, traders of aggressive style require patience and ideal trade situations of the market. The human nature of being emotional is the biggest drawback of the trade, and for aggressive trading, this phenomenon of human nature needs to be controlled. Trading psychological factors like fear and greed can cause huge damage for the investors. Therefore, traders of aggressive style have to be more patient; otherwise, the whole effort will go in vain. 

So, the first trading strategy would be to control one’s emotions for better trade outputs. 

Now, let’s quickly check the aggressive trading strategies that traders could use for investing in the forex market: 

Add to Winners

The simplest method of aggressive trading is adding to winners. The market moves in favour of the trader and helps in chasing profits. Traders should enter the market when they feel that the market is moving in their favour. After which, they can pause the trade for a short time and keep repeating the process and adding on during pullback. 

The strategy world on the thought process lets the winners run and add more to increase the potential profits of the traders. The initial trade proves to be profitable for the investor then the trader maximises the profits when the market proves the move of the trader right. 

However, there are pitfalls as well in the aggressive trade with the high risks. 

Trading More Markets

Trading in more and various markets is another aggressive trading strategy that traders can use. Investment in more markets increases the chances of earning more money with subsequent risks. For example, traders can invest in the forex market along with penny stocks or any other instrument to diversify their portfolio and have more opportunities at the same time. Aggressive trading works better with penny stocks and could be a profitable investment. 

So, adding more trading markets into the investment can turn out to be a good decision and strategy for the traders of aggressive trading psychology strategy. 

Trading Entries

Entry in the trading market for aggressive traders is open from the beginning of the price fluctuations. However, traders have to take care of the timings as they matter a lot for a trader to enter the forex market trade on point. The aggressive traders have to be good at picking the accurate price level and their ability to execute the trade. The two things have to be correct before the market makes a move. Once these two key areas are sorted, traders can buy and sell currencies in the market. 

Setting Aggressive Targets

Traders of aggressive style have to set their targets and market moves according to the profits they want to earn. Bull markets and bear markets are both different and require strategies according to that market. In a bull market, aggressive traders trade on the trend, and traders have to be patient to let the profits build. Whereas in a bear market, traders have to be aggressive with the profits due to shorter downtrend duration. Traders have to understand the market; in bear markets, the pullbacks are brief, so traders have to cash in faster. 

Forex Aggressive Trading Psychology

To trade in the forex market, knowing the trading psychology of the market is essential. Forex trade requires control over emotions to have balanced trade. There are certain key factors that traders of the forex market are supposed to follow: 

Revenge Trading 

Not indulging in revenge trading is the first psychological tip of the forex market. Traders should not take any step in fear of loss or due to emotional problems. Anger, frustration, revenge, fear, etc., are the threats that should be avoided in the forex market. Traders need to control fear and revenge to get a step forward in the market. These emotions make a trader leave the discipline and shift the focus of the trader. These two factors could be dangerous for the forex trade; if a trader manages to control them, high profits could be earned. 

Responsibility

While trading in a market full of risks, traders have to take responsibility for those downfalls. It should not be blamed on others or the secondary factors but oneself. To manage the situation and not repeat it, traders have to take responsibility for the trade they carry out. The responsibility would encourage traders to look out for different possibilities to handle the situation and, next time, earn profit rather than losing the trade. It may even change the trading style or the instrument one wants to invest in. 

Take a break

Forex traders should take a break when they feel tired or have tried everything, but nothing is working. To manage such a situation, traders should take a small break to find solutions. The break would refresh them and enhance their focus on the forex trade. Additionally, traders get time to review their trade history and recall what worked well at a certain condition. In short, a therapy for better trade and efforts for the trade without losing the cool. 

Trade Small

Another factor is to trade in small lots; this would increase the lost confidence of the trader. When traders lose, they have a mental breakdown which could be balanced with these ideas. Sometimes over aggressive trade could turn out to be a total loss, traders should avoid such situations, and therefore, trading in small lots is the right way. 

Traders can also embrace the process of trade with all the above-mentioned points that would benefit them in forex trading. 

Conclusion

Traders of aggressive style have to be quick in the forex trade. One can not handle the loss of such trades due to high investments. To carry out the trade in the forex market, traders must use aggressive trading psychology strategies. The strategies include adding to winners, more market trade, trading entries and setting targets. All these would help to achieve the goal along with the patience that traders need to manage. 

An aggressive trade won’t be feasible without the patience and emotional control of the traders. For trading in the forex market, there are several reputed brokers that provide traders with aggressive and conservative etc. styles to trade in the forex market. I would recommend TradeATF and ROinvesting; these two are the best online brokers with all the required facilities. 

Trading View

Top Brokers