Forex Traders Psychology. a Behavioral Finance Research Paper

Research Paper (undergraduate) from the year 2016 in the subject Business economics - Investment and Finance, grade: 90%, Birzeit University (Business and economics), course: MBA, language: English, abstract: Psychological factors like emotion, mood, stress and personality interfere with trading behaviors, stable emotions lead to good trades. This research study examines how stable emotions, mood and stress affect trading behavior. Methods: Traders were randomly selected over 2 questionnaires (N=50) each in 39 different countries, Trading emotion stability Index TESI and trading Stress index TSI where used to measure both Emotions and stress and compare them with different factors within sample. Results: Traders with low TESI are more confidence and more risk takers, traders with good mood reflect stable and confident traders, there is significant correlation between stress and traders rate of return. Conclusion: The more stable trading emotion and the better mood they have the more confidence decision traders make and the more risk they take, decreasing trading stress can play role in increasing a traders return. Over 40 countries around the world, forex traders faces same difficulties, same challenges and emotional biases. What make one traders different of others is his personality and psychology.